MANILA, Philippines—Gatchalian group-led property developer Philippine Estates Corp. (PHES) plans to proceed with a stock rights offering that can raise up to P1.44 billion for its expansion program.
In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday (June 23), PHES said it had obtained board approval to apply for the listing of new shares to be issued for this capital-building exercise.
The proposed stock rights offering was first approved by PHES’ board last March, but the firm was unable to submit the listing application with the PSE within 90 days.
The latest disclosure said PHES was still finalizing the application. As such, its board reapproved the stock rights offering to comply with the 90-day timetable for application for listing on PSE.
Exempt from registration
According to the offering plan, up to 1.445 billion common shares would be offered to existing stockholders at a maximum price of P1 per share. One stockholder would be entitled to buy one new share of PHES.
The proceeds would be used to “acquire land to be developed by the company and the remaining will be utilized for working capital.”
The disclosure said the transaction would be exempt from registration and would require only a confirmation of exempt transaction from the Securities and Exchange Commission.
PHES was originally incorporated in 1983 as Philippine Cocoa Estates Corp. with the primary purpose of engaging in all phases of agriculture. In 1996, the Gatchalians’ Wellex Group gained majority control, revamped its management and opted for a change in business focus from agriculture to real estate.
Compete with developers
Among the projects completed by PHES were: the Pearl of the Orient Tower in Manila; Metrotech Industrial Park Valenzuela; Pacific Grand Villas Phase I, II, III and Pacific Grand Townhomes Phase I in Lapu-Lapu City, Cebu; and Chateaux Geneva in Jaro, Iloilo City.
According to its latest annual report, PHES wanted to compete with the biggest real estate developers nationwide.
For its residential projects, PHES targets the lower middle to middle-income families composed mostly of professionals and overseas Filipino workers.