Ayala Land bids P24B for FTI property
Ayala Land Inc. was declared the highest bidder on Tuesday for a 74-hectare portion of the Food Terminal Inc. property in Taguig City, besting Empire East Land Holdings Inc. and Robinsons Land Corp.
For what could be the sole big-ticket offering from the Privatization and Management Office this year, Ayala Land submitted a net present value (NPV) bid of P23.9 billion, which was almost thrice the required minimum NPV bid of P8.01 billion.
Ayala Land also committed to an upfront payment of P19.5 billion, or 81 percent of the total NPV tendered. This was about nine times the required minimum of P2.2 billion.
Robinsons Land was named the second-highest bidder with an NPV bid of P14 billion. Empire East tendered P10.2 billion while four other pre-qualified companies did not submit their bids. These included Century Properties Group, Filinvest Land Inc., Rockwell Land Corp. and SM Land Inc., which was the only firm that did not send a representative to witness the proceedings at the AIM Conference Center in Makati City.
In nominal terms, Ayala’s bid amounted to P24.3 billion; Robinsons, P14.7 billion; and Empire East, P11.2 billion.
Karen G. Singson, the PMO’s chief privatization officer, explained in an interview that the bid and award committee focused on the NPV amount since the bidders were allowed to propose payments in tranches at a discount of 10 percent. In other words, by considering the NPV bids, the committee determined the value of the nominal bids at bidding day by netting out the discount.
“We were also very cautious about making this a transparent public bidding to avoid possible accusations of collusion,” Singson said. “As you can see, the gap between the highest bid and the second-highest bid is very wide. That shows very clearly which is the highest bid.”
Christine V. Antonio, PMO’s deputy privatization officer, said the committee has up to five business days to conduct a post-qualification process, which basically means going over the bid documents with greater care than the once-over conducted on Tuesday.
Once the documents get past this “authentication validation,” the PMO will then recommend to the Cabinet-level, inter-agency Committee on Privatization (COP) to declare a winner and issue a notice of award.
“We have 15 business days (from bidding day) to accomplish everything until the issuance of the notice,” Antonio said. “From the date of receipt of the notice, the winning bidder has 60 business days to settle the upfront payment and 365 days (from bidding day) for full payment.”
Antonio added that turnover of the parcels of land auctioned off would be pro-rata—81 percent of the land might be turned over to the buyer upon closing or settlement of the upfront payment and full turnover upon full payment.
“We are very happy with the bidding results specially with the amount of upfront cash (that Ayala tendered),” Singson said. “It’s something that the government can really put to good use.”
Property tycoon Andrew Tan said the results of the bidding was a good indication that investors were bullish about the economy and the real estate industry.
Based on the PMO charter, half of the proceeds of the sale would be remitted to the Bureau of the Treasury and the remainder would be for the use of the FTI, which is under the National Food Authority.
