Group offers P2.2B to buy into MJC property unit

The Manila Jockey Club (MJC) is evaluating a “firm” P2.25-billion buy-in proposal from a consortium of Hong Kong-based and local groups keen on taking over 70 percent of MJC Investments Corp. (MJIC).

MJIC is the Manila Jockey Club’s hotel and tourism estate unit.

According to MJIC chairman Alfonso Reyno Jr., members of the board will discuss Monday the proposal in line with the company plan to beef up its capital base to P5 billion from P1.5 billion.

The proposal to subscribe to new shares of MJIC will enable the new investing group to acquire 70 percent of the company’s expanded capital. If the MJIC board were to accept the buy-in proposal, MJIC would cease to be a subsidiary of Manila Jockey Club Inc., even though it would retain its 30-percent interest in MJIC, Reyno told the Inquirer Saturday.

The prospective investor group, he said, had expressed a firm interest in MJIC’s plan to increase its capital. The group is willing to turn over P1.1 billion to MJIC right away as initial subscription, he said.

“With this additional subscription, we will be able to complete our ongoing projects, including the hotel-tourism hub in San Lazaro (Manila) and our hotel in Carmona (Cavite),” Reyno said.

A portion of the San Lazaro estate consisting of about 7,500 square meters was earlier transferred to MJIC under a property-for-share arrangement. MJIC plans to put up a “world-class” hotel on the property, which is registered with the Philippine Economic Zone Authority.

The fresh equity infusion in MJIC may also allow Manila Jockey Club to pursue its expansion projects without incurring additional debt, Reyno said.

“I would rather have more partners than borrowers in the bank,” he explained.

MJC is continuing talks with prospective joint venture investors for other undeveloped parcels of land in Manila. One is a 1.67-hectare parcel while another is a 5,000-square meter property near the business process outsourcing unit in San Lazaro.

“Depending on the project, we evaluate firm proposals like what we did with Alvel (Land),” said Reyno, who also chairs MJC.

Reyno said the greater value to be unlocked with the entry of foreign investors could make up for the dilution of Manila Jockey Club’s stake in MJIC.

With the influx of investments in tourism projects, Manila Jockey Club expects its business mix to change in favor of property development. But horse racing and gaming will continue to be substantial components of the group’s business.

Manila Jockey Club conducts its racing operations at its facility in Carmona, Cavite. It also operates off-track betting stations (OTBs) and will expand its OTB network in Metro Manila as well as in provincial areas.

MJC has recently ventured into gaming operations with the establishment of a casino, the Pagcor Club San Lazaro, located at the Turf Club in San Lazaro Leisure Park, Carmona, Cavite.

MJC also struck a deal with Ayala Land Inc. for the development of two office buildings with single-level retail development on a property of MJC in Sta. Cruz, Manila, which was formerly part of the San Lazaro racetrack.

It was earlier reported that MJC is in talks with four large property developers—the Ayalas, the Antonios, the Consunjis and the group of taipan Andrew Tan—for the development of a hotel, entertainment and tourism hub in Manila.