AGI sets aside P410B for expansion | Inquirer Business
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AGI sets aside P410B for expansion

/ 05:04 AM July 02, 2019

Tycoon Andrew Tan-led conglomerate Alliance Global Group (AGI) has earmarked P410 billion for capital spending in the next five years through 2024, the bulk of which will be used to scale up its property empire.

“Our five-year capital spending program signals our ongoing thrust to pursue an aggressive but organic growth strategy for our various businesses. It is our intention to continue to reinvest in these businesses to sustain our growth pace,” AGI chief executive officer Kevin Tan said in a disclosure to the Philippine Stock Exchange on Monday.

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The planned budget for 2020-2024 capital outlay is higher than the P377-billion allotment for the past five years, inclusive of this year’s budget of P85 billion.

It is also significantly bigger than the P218-billion allotment for 2010-2014, which was when AGI went into the international capital market.

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Around 73 percent of AGI’s outlay in the next five years will be allocated for flagship business Megaworld Corp., a leading developer of integrated urban townships.

This will fund the company’s new and ongoing township development projects, planned residential launches and continued build-out of offices, lifestyle malls and hotels throughout the country.

Travellers International Hotel Group, Inc., owner and operator of Resorts World Manila (RWM), will account for 15 percent of the five-year budget. This will mostly fund the development of its second integrated resort, Westside City Resorts World, on a 30.5-hectare property within the Pagcor Entertainment City complex in Parañaque.

Travellers will start the construction of the casino and mall once piling works are completed.

Another 5 percent will go to fast-food arm Golden Arches Development Corp., which holds the exclusive franchise to operate quick service restaurants in the Philippines under the “McDonald’s” brand.

Beverage arm Emperor Inc. will account for 4 percent of the budget.

After heavily investing since 2014, Emperador is now pursuing an organic growth strategy by fortifying its global distribution system for its premier whisky products under Whyte and Mackay, as well as its Spanish brandy products under Bodegas Fundador.

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The company is also expanding its product mix in the domestic market with the recent introduction of The Bar Premium Gin, while it maintains market leadership in the brandy segment with its flagship Emperador Brandy.

The balance of 3 percent of capital spending will be for Infracorp Development Inc., proponent of the two-kilometer Fort Bonifacio-Makati Skytrain monorail project, and a member of the consortium set to do the rehabilitation of Ninoy Aquino International Airport. Both projects are awaiting approval from the National Economic and Development Authority. —DORIS DUMLAO-ABADILLA

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TAGS: Alliance Global Group (AGI), Business
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