Cebu Holdings, Cebu Property Venture eye better portfolio, bigger land bank

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 approved in separate stockholders’ meeting of the two property units of Ayala Land Inc. (ALI) last week.

“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 chair Anna Ma. Margarita Dy in a press conference after the meeting.

She pointed out though that they would still need approvals from the Securities and Exchange Commission, Bureau of Internal Revenue, Philippine Stock Exchange and the Philippine Economic Zone Authority before formalizing the merger. The approvals are expected to be secured in the next two to three months.

In line with the merger, CHI will exchange 1.06 common shares for every one CPVDC Class A common share or Class B common share. This will result in 996.77 million CHI shares at the completion of the merger. With this, CHI will have a total of 2.157 billion outstanding shares.

“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.

In her presentation during the stockholders’ meeting, CHI chief finance officer Ma. Luisa Chiong said the merger would address listing requirements by being able to comply to the 20 percent public float rule by 2020.

It would also mean minimized costs of maintaining two listed companies specifically in terms of meetings, manhour costs, professional fees and listing fees.

“There will be a more balanced portfolio as CHI’s expanded mix of businesses will be benefited by CPVDC’s strong office leasing portfolio and vice-versa. There will also be complimentary landbank portfolio,” Chiong said.

ALI holds a 71.96-percent stake in CHI, which is the developer of the 50-hectare Cebu Business Park.