8990 Holdings in P3-B bid to double land bank

Listed low-cost property developer 8990 Holdings Inc. has set aside P3 billion of its capital expenditure (capex) program for the year to fund its expansion thrust as it aims to double its land bank to 500 hectares by the end of the year.

In an interview last Friday, 8990 Holdings president and chief executive Januario Jesus Gregorio B. Atencio III said that three-fourth of the company’s P4-billion 2014 capex for this year would be used to acquire additional lots in Bacolod, Butuan, Davao, Metro Manila and Zamboanga to add to its 338-hectare land bank to date.

Its land bank is expected to reach 500 hectares by yearend or the first quarter of 2015—double the 250 hectares reported last May when the company made a follow-on offering worth P5.6 billion.

“We raised capital to pare down debt and increase our land bank,” Atencio pointed out.

He said the company would expand into the following areas which have “very good potential for mass housing”—Bacolod, Bulacan, Metro Manila and Zamboanga.

“We plan to put up vertical mid-rise developments in Metro Manila as well as horizontal mass housing projects for the rest of the country,” he explained.

Expansion is also underway in the areas where 8990 already has existing residential projects, such as Angeles City, Cavite, Cebu, Davao and Iloilo, Atencio said.

Also, 8990 Holdings is “on track” to undertake this September the first private sector offering of asset-backed securities worth P1 billion, he said.

“Everything is already ready. We’re hopeful that we will secure the approval of the SEC (Securities and Exchange Commission) very soon.”

The executive said the company could achieve the yearend goals of up to P8 billion in revenue as well as P3.2 billion in net income.

“Our first-half figures show that we have had achieved a little above 50 percent of our 2014 targets,” he noted.

The company plans to cede P1 billion of its receivables to investment bank SB Capital for conversion into debt paper.

This year’s projected P8 billion worth of revenue would come from the delivery of about 9,000 new mass housing units, the company earlier revealed.