GT Capital, Pro-Friends surprise with breakup

Ty family-led conglomerate GT Capital Holdings is unwinding its investment in mass housing developer Property Company of Friends (Pro-Friends) after a four-year partnership.

GT Capital signed on Friday what was described as an “amicable” deal to give up its 51-percent stake in Pro-Friends in exchange for P20 billion worth of real estate assets in Cavite.

Pro-Friends has agreed to redeem the shares from GT Capital using its landbank as its currency, ceding 702 hectares of assets located mostly within its flagship Lancaster New City (LNC), its biggest property project.

“This amicable proposed redemption allows both parties to focus on our respective areas of expertise. I look forward to a master-planned community that will integrate the needs of existing residents, as well as those of the development’s future population, for many generations to come,” GT Capital vice chair Alfred Ty said in a disclosure to the Philippine Stock Exchange.

“Given the scale of future redevelopment being considered, the existing residents within LNC will stand to gain significantly from the adjacent areas,” Pro-Friends president Guillermo Choa said.

The properties to be transferred to GT Capital include land strategically located along Daang Hari Extension and the future Cavite-Laguna Expressway (CALAX), which is linked to the Cavite Expressway (CAVITEx).

The transaction is still subject to regulatory approvals.

GT Capital first bought into Pro-Friends in 2015 with the purchase of a 22.68-percent stake valued at P7.24 billion and an option to raise this over a three-year period. GT Capital exercised its option to increase its stake in the company in 2016, buying an additional 28.3-percent interest for P8.76 billion.

The mass housing developer was seen to complement the real estate businesses under GT Capital’s main property development arm, Federal Land.

The breakup surprised some analysts, given that Pro-Friends had done well in terms of reservation sales and earnings last year.

In 2018, Pro-Friends booked revenues of P10.4 billion, up by 50 percent from the previous year. Its net profit last year rose by 63 percent to P1.2 billion.

Apart from property development, GT Capital has interests in banking, automotive assembly, importation, dealership, financing, life and general insurance, and infrastructure.