Premiere Horizon Alliance Corp. (PHA) has entered northern Luzon’s real estate market with a deal to acquire 55 percent of Goshen Land Capital Inc. (GLCI), a Baguio City-based property developer, for P440 million.
“Premiere Horizon’s investment focus and mission of invigorating the countryside is complementary with Goshen Land’s business strategy,” PHA said in a disclosure to the Philippine Stock Exchange Friday.
Trading on PHA shares was halted until 10 a.m. Friday to give investors time to digest the transaction, whose valuation is about a third of the company’s market capitalization. The transaction has been approved by the company’s board. Also, both parties have already signed a memorandum of understanding.
PHA will invest in GLCI by buying a mix of primary and secondary shares at a price per share of P500. Upon signing of the memorandum of agreement, PHA will initially subscribe to 270,000 shares amounting to P135 million, and 280,000 shares amounting to P140 million from the majority shareholder for a total of 550,000 shares, or 55 percent of the total authorized capital of one million GLCI shares.
Thereafter, GLCI will increase its authorized capital to 1.6 million shares, of which PHA will subscribe to an additional 330,000 shares amounting to P165 million, bringing its total ownership to 880,000 shares for a 55-percent interest.
The existing shareholders will end up with 720,000 shares, or a 45-percent stake. The disclosure added that GLCI president and chief executive officer, Alexander Bangsoy, would continue to head the management team of the company.
“Premiere Horizon’s investment will accelerate Goshen Land’s growth and expansion,” the disclosure said.
Incorporated in 2007, GLCI develops innovative communities of low to mid-rise residential and commercial condominiums as well as student dormitories. It presently has 18 projects with more than 3,800 units located in Baguio, Benguet and La Trinidad.
Based on its latest financial statement, GLCI has about P1.6 billion in assets as of end-2014. It chalked up a net profit of P80.62 billion in 2014 from the previous year’s P67.81 million.
Revenues from real estate sales amounted to P572.43 million— higher than the P505.83 million reported in 2013.
PHA, which has a market capitalization of about P1.33 billion, is an investment holding company that focuses on projects in the countryside. Its stated mission is to “engage in sustainable countryside development using new technologies and best practices in the fields of food security, natural resources development, life sciences, technology and tourism.”