Property giant Ayala Land Inc. is transforming Prime Orion Philippines Inc. (Popi) from a niche retail center operator into its logistics and industrial estate arm with a P3-billion share-swap deal that will infuse Laguna Technopark Inc. (LTI) into this subsidiary.
ALI has agreed to exchange its 75-percent stake in LTI for additional shares in Popi, owner and developer of the popular bazaar hub in Divisoria, Tutuban Center.
Popi will issue 1.22 million common shares to its parent company in exchange for the stake in LTI.
This transaction will boost ALI’s direct ownership in Popi to 63.9 percent from 54.91 percent, ALI said in a disclosure to the Philippine Stock Exchange yesterday.
“Combining LTI and Popi will create a bigger entity that will pursue real estate logistics and industrial development and reposition Popi to be a leading real estate logistics and industrial estate developer and operator in the Philippines,” ALI said.
Defying the downturn in the stock market, Popi’s shares surged by 5.43 percent to close at P3.30 per share on Friday as ALI’s plan to reposition Popi’s business excited investors. The company is currently valued by the stock market at P15.41 billion.
In a separate disclosure, Popi said its board had approved the acquisition of the 75-percent equity interest in LTI from ALI.
A prime developer of industrial parks, LTI owns and manages the 460-hectare Laguna Technopark which spans portions of the cities of Santa Rosa and Binan in Laguna. It also owns and operates the 118-hectare Cavite Technopark in Naic.
LTI’s industrial parks have been the preferred locations of local and foreign manufacturing, processing logistics and distribution companies in the Philippines.
The documentation for the transaction is still being finalized. Target execution is within April this year, Popi said.
The top brass of the Ayala group, the country’s oldest business house, has been supportive of manufacturing renaissance in the Philippines.
For the longest time, building a strong manufacturing sector is seen as a key weakness of the Philippine growth story which heavily relies on services which can only directly employ highly educated workers. The industrial sector, on the other hand, is seen key to creating more jobs for semi-skilled workers.
The group entered the technopark business in 1989 when it built Laguna Technopark in partnership with Japanese firms Mitsubishi and Kawasaki Steel Corp. This was to meet a massive demand for industrial space. This was one of the country’s first privately-owned technopark.
The initial venture has since then expanded, making available space for light and medium, nonpolluting enterprises, from both global and local markets and generating over 100,000 in direct employment.