PROPERTY giant Ayala Land Inc. has secured more time to close a deal that will pave the way for its entry as a majority investor into Prime Orion Philippines Inc. (Popi), owner and developer of the popular bazaar hub in Divisoria, Tutuban Center.
Ayala Land and Popi disclosed to the local stock exchange on Friday their mutual agreement to extend the due diligence period on Popi for another 30 days or until Dec. 17 this year.
The deal between the two companies was executed on Aug. 13. Ayala Land’s entry into Popi is seen providing the financial muscle to efforts to redevelop Tutuban Center and double its retail space to ride on the robust consumer spending in the country.
During Popi’s last stockholders meeting, Ayala Land was given the imprimatur to come in as the majority investor in the company. Company stockholders also approved an increase in Popi’s authorized capital to P7.5 billion from P2.4 billion.
Ayala Land is buying 2.5 billion new shares to be issued by Popi out of the increase in authorized capital stock for P2.25 per share, giving it 51 percent control of the company.
To date, Popi is earning about P400 million yearly in rental income from Tutuban Center, which has about 60,000 square meters in gross leasable area (GLA).
Popi expects to unlock more recurring earnings from the doubling of the GLA. At the same time, it sees room to grow Tutuban Center given that it has so far built on only eight hectares of the 20-hectare property.
In March, Philippine National Railways (PNR) turned over to Popi’s indirect subsidiary, Tutuban Properties Inc. (TPI), about three hectares of leased property along Tayuman and, in June, PNR also turned over about 5.8 hectares of property along Dagupan St. in Divisoria. The project is expected to be integrated with the North South Railway Project of the Department of Transportation and Communications and PNR.