MJIC aborts P2.15B equity infusion from new investors

The Manila Jockey Club group has decided to keep a 51-percent stake in property unit MJC Investments Corp. (MJIC), aborting the latter’s acceptance of a P2.15-billion fresh equity infusion from new investors.

MJC said its board decided to keep a majority stake in MJIC in a meeting on Wednesday and to modify a resolution passed by the latter only last Monday. “This decision shall ensure the full realization of the corporation’s vision and successful implementation of its ongoing projects,” MJC disclosed to the Philippine Stock Exchange.

For its part, MJIC said its board adopted the decision of its parent company MJC in a special meeting. This will modify MJIC’s decision to accept the subscription by 16 companies to new shares in the company.

“The corporation shall now proceed to negotiate and accept new investments in accordance with such guideline, i.e., that at least 51 percent of the subscribed expanded capital shall remain with the parent company,” the MJIC said.

Last Monday’s resolution to accept a P2.15-billion investment would have ceded 70 percent control of MJIC to the new investor group.

Asked what caused the change of heart, Alfonso Reyno Jr., chairman of both MJC and MJIC, said the parent company decided it did not want to lose control to be able to complete the projects.

The fresh infusion from new investors would have been used to fund the construction of a hotel, tourism and entertainment hub at the San Lazaro Business and Tourism Park in Sta. Cruz, Manila. The tourism hub is envisioned to be an 18-floor tower and podium with an initial complement of 160 rooms and 900 parking slots at opening and expected to be completed in 2015.

“We may get less in equity but we can balance this with borrowings,” Reyno said. “MJC can also participate in equity-raising in case we all have to increase our investments along the way.”

Since the new shares to be sold to new investors would be less, Reyno said MJIC would have to pare down fresh equity infusion to about P550 million.

He assured stockholders that the investors that MJIC would get would not in any way be related to the existing shareholders but would be new strategic partners who could enhance the project. He said the new investors would be disclosed once the revised buy-in deal has been finalized.

The shareholders of MJIC have approved the increase of the firm’s capital stock from P1.5 billion to P5 billion to accommodate the entry of new investors and new capital as the company prepares to “aggressively enter the fast-growing tourism sector.”