CEBU CITY-A more balanced portfolio and complimentary land bank and resources are expected with the merger of Ayala-led Cebu Holdings Inc. (CHI) and its subsidiary Cebu Property Ventures Development Corp. (CPVDC).
The merger was formally approved in separate stockholders’ meetings of the two property units of Ayala Land Inc. (ALI) last Tuesday afternoon.
“It would simplify our operations. Instead of two publicly listed companies, we will just be doing it for one larger entity. We will continue with our projects. We have five growth estates in Cebu,” said CHI Chairman Anna Ma. Margarita Dy in a press conference after the meeting.
She pointed out though that they would still need approvals from four government agencies before formalizing the merger.
These agencies are the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), Philippine Stock Exchange (PSE), and the Philippine Economic Zone Authority (PEZA).
These approvals are targeted to be completed in the next two to three months.
In the meantime, Dy said both entities would be operating as before.
As part of the merger, CHI will exchange 1.06 common shares for every one share of CPVDC Class A common shares or Class B common shares. This will result to 996.77 million CHI shares at the end of the merger.
With this, CHI will have a total of 2.157 billion outstanding shares after the merger.
“Our leasing portfolio will grow by almost two and a half times after the merger. We will be opening new hotels in addition to the Seda Hotel in the Cebu Business Park (CBP). Our gross leasable area will grow from 250,000 to almost 600,000 in the next three to five years,” Dy told reporters.
The merger would address listing requirements by being able to comply to the 20-percent public float for 2020, CHI Chief Finance Officer Ma. Luisa Chiong explained in her presentation during the stockholders’ meeting.
It would also mean minimized costs of maintaining two listed companies specifically in terms of meetings, man-hour costs, professional fees, and listing fees, among others.
“There will be a more balanced portfolio as CHI’s expanded mix of businesses will be benefitted by CPVDC’s strong office leasing portfolio and vice-versa. There will also be complimentary landbank portfolio,” Chiong said.
CPVDC’s immediately developable parcels in the Cebu IT Park (CITP) would balance the growth horizon for CHI’s existing land bank, she added.
CHI is an affiliate of ALI which holds shares of 71.96 percent of the company. CHI is the developer of the 50-hectare Cebu Business Park.
On the other hand, CPVDC is a subsidiary of CHI which holds 76.26 of the company’s stocks while ALI holds 7.8 percent of shares of CPVDC which is the owner and developer of the Cebu IT Park.
Another significant shareholder of the CPVDC is the Cebu Provincial Government which has 8.28 percent shares.
After the merger, the province’s share would become 3.83 percent, which, Dy explained, is not disadvantageous as it can be considered “a smaller slice of a bigger pie.”
She said all shareholders of the CPVDC would also become shareholders of the entire CHI after the merger.
CHI President Aniceto Bisnar Jr. said they were setting aside from P1.8 billion to P2 billion in capital expenditure for 2018, depending on construction progress.
In 2017, the group’s capital expenditure was at P2.1 billion.
“With the merger, we will be continuing with our investment program,” he said.
Among CHI’s ongoing developments are the Gatewalk Central in Barangay Subangdaku, Mandaue City; and Seagrove in Barangay Punta Engaño, Lapu-Lapu City./lb