Biz Buzz: To pay or not to pay
After getting a ruling from an arbitration tribunal to boot out CJH Development Corp. (CJHDevCo) of businessman Roberto “Bob” Sobrepeña from the former US military facility Camp John Hay, the next move for the Bases Conversion Development Authority (BCDA) is to question the second part of the ruling: The order for the state-owned corporation to pay P1.42 billion in back rentals to its long-time unwanted tenant.
Overall, the BCDA deemed it a victory to get a unanimous ruling from the tribunal ordering CJHDevCo to vacate the 625-hectare estate in Baguio City. After all, this is a case that BCDA president Arnel Casanova has been working on for decades, from the time he was a legal counsel for the institution.
However, the BCDA believed there was ground to question the ruling on rental payments. BCDA is seeking to have the chair of the arbitration panel inhibited from the case. Apparently, the chair had previously issued adverse rulings against the BCDA on this same case, which the BCDA thinks should be enough reason to inhibit. Whether or not one arbitrator is impartial or not is subject to another legal debate.
Since it’s unusual for arbitrators in the same panel to have differing opinions when it comes to monetary compensation (in this case one arbitrator opined that it’s CJHDevCo that should pay P2.4 billion to the BCDA), the state corporation now seeks to question the independence of some members of the arbitration panel. From the point of view of the BCDA, CJHDevCo was the one that made a lot of money from this property deal as it had been able to declare dividends while deferring payments due the government.
The next step before the execution of this Camp John Hay decision is the judicial confirmation of award, during which this P1.4-billion compensation is expected to be challenged by BCDA. The Sobrepeña group, for its part, has stated that it would like to collect the P1.42 billion in back rentals awarded by the tribunal before vacating the property. Doris C. Dumlao
Rocket investment
Philippine Long Distance Telephone Co. (PLDT) might have slowed down on major acquisitions given looming challenges in the domestic telco landscape. But that’s okay since one of its recent investments, Germany’s Rocket Internet AG, has only ramped up.
In fact, the Berlin-based company, known for cloning successful Internet businesses like Amazon and Airbnb and then roll them out mainly in emerging markets outside the United States and China, raised another 588.5 million euros (P29.6 billion) in a new share offering to institutional investors a few days ago.
(Filipinos might be familiar with Rocket through online retailers like Zalora and Lazada).
The fund-raising came as a surprise since it was just four months after Rocket raised 1.4 billion euros in Germany’s biggest IPO last year. Rocket said this could finance more acquisitions.
What this means for PLDT, however, is that the telco’s 6.6-percent stake in Rocket (already pared down from its initial 10 percent before the IPO and successive fund-raising rounds) drops to about 6.1 percent.
Some observers here would not mind that fact given their skepticism over this kind of business, which is booming in certain parts of the world but not yet in the Philippines.
PLDT is nevertheless happy with the deal. For one, it is already establishing a business venture with Rocket that would increase its e-commerce footprint.
Moreover, the latest fund-raising was priced at a higher valuation of 49 euros a share. This means PLDT’s current stake is worth about 493.5 million euros, almost 50 percent better than when it entered last September.
Of course, these numbers matter more if PLDT chose to sell at this moment, which its officials said was not on the immediate horizon. That’s technically true since PLDT was subject to the the usual lock-up requirements during the IPO, meaning no sale can take place till the latter part of 2015. Miguel R. Camus
Gas talks
Some officials of Japanese firms Osaka Gas were in town last week for exploratory talks with Manila Electric Co. on a potential power generation project.
Osaka Gas is a leading energy supplier in Japan that has been in operation for more than a century. It has been earlier reported that Meralco is keen on putting up some liquefied natural gas (LNG)-fired power plant capacity so a potential partnership with Osaka Gas is not surprising. Internationally, Osaka Gas also has interests in the oil and gas industry from upstream to downstream, making it even more interesting for the group led by businessman Manuel V. Pangilinan. Doris C. Dumlao
