Biz buzz: Logistics firm in the crosshairs

No one messes with this Davao-based businessman nowadays. Not when he is known to be one of the very few from the business community who are close to President Rodrigo Duterte. That’s because he has long been a supporter of the Chief Executive of the Philippines, even when he was just the chief executive of Davao City.

In fact, “Mr. U”—as we shall call him—is the kind of man who “gets quality face time with the President,” as one of his business associates put it.

But at least one businessman seems to have failed to receive the memo that Mr. U is not to be crossed. You see, this businessman—let’s call him “Mr. T”—has had discussions with Mr. U ever since the latter became interested in acquiring a stake in the former’s shipping and logistics firm. (And believe us when we say this, Mr. U is loaded, especially of late.)

But Mr. T, it seems, was asking for too much for a stake in the shipping and logistics firm he controls. It’s never a good idea to ask for too much when Mr. U is involved. (Just ask another so-called “oligarch,” or so the rumor goes.) Unhappy with the price that was being offered to him, Mr. U approached the company’s other shareholder, this time a foreign entity who was only too happy to sell out, since the firm wasn’t exactly a money spinner.

Caught off guard—and upset at having a potentially hostile party now owning a substantial stake in his firm—Mr. T went to court, arguing that the foreign partner should have offered to sell its stake to existing shareholders first before talking to an outsider.

Meanwhile, Mr. T was able to raise (to the surprise of a number of business community observers) a $10-million bond to reassure his existing partners while the looming battle royale takes shape. This will also help keep Mr. U out of the company’s boardroom (at least temporarily) because … who knows what the Davao businessman will uncover when he gains access to the company’s secrets, right?

In any case, this battle is rapidly turning into a so-called corporate “shootout” where it will be a “you-buy-me-out-or-I-buy-you-out” scenario. If it comes to this, the smart money is always on the man who has more money. And, apparently, better connections. —DAXIM L. LUCAS

B&B in Lio

Ayala Land’s beachfront bed and breakfast experiment in El Nido, Palawan, has reached its masterplanned Lio Tourism Estate with the soft opening this week of a 40-room B&B establishment called Casa Kalaw. On its Facebook page, Casa Kalaw looks too pretty to be a backpacker’s hub. Nonetheless, it has a lower price point than any of Ayala’s four island resorts in El Nido.

“They really didn’t want to open yet, but people wanted to book, so it’s just a soft opening. We told them to manage their expectations,” Jose Emmanuel Jalandoni, ALI senior vice president and group head of commercial business, said. On its maiden offering, Casa Kalaw sold rooms at P8,000 a night.

Casa Kalaw is the very first establishment to open in Lio, a 325-hectare beachfront tourism estate. Since there’s nothing else in the estate yet, the first guests can have the entire beach to themselves, avoiding the crowd seen in other tourism hotspots like Boracay. And while the great blue sea is right out there, this B&B also offers a swimming pool. Likewise part of this B&B experiment, Jalandoni said Ayala Land would open two other B&Bs with 20 rooms each at Lio by the first quarter of next year. Lio’s retail strip is also expected to open by then.

To recall, Ayala Land first pilot-tested the B&B model at the old El Nido hub when it opened El Nido Cove. Ayala’s B&Bs are seen to raise the bar for similar establishments and create a model for sustainability as they will produce biodiesel through the recycling of used cooking oil for internal power generation. Ayala Land’s crown jewels in Palawan also include four deluxe island-resorts: Apulit, Lagen, Miniloc and Pangulasian. —DORIS DUMLAO-ABADILLA

Seda expansion

People hardly talk about it being “more fun in the Philippines” these days, especially with extrajudicial killings grabbing headlines across the globe. This, however, has not curbed Ayala Land’s expansion of its hospitality business.

Apart from building small B&Bs, Ayala Land is also opening more hotels under its boutique hotel brand “Seda” in the coming year. The biggest Seda Hotel will open in Quezon City at Vertis North, offering 438 rooms. This is within the same area where the TriNoMa shopping mall is. Seda Vertis North will come with a ballroom, thus likewise adding to the supply of events areas in Quezon City.

Ayala Land is also set to open next year the 150-room Seda Bacolod, addressing the dearth of business hotels in this thriving city. —DORIS DUMLAO-ABADILLA

‘Usurpers’ and ‘land grabbers’

The National Housing Authority (NHA), the government’s principal shelter agency, is reportedly facing serious challenges securing and maintaining the integrity of prime government land under its care.

With more than P100 billion in assets as of 2016, the agency is sitting “on top of a gold mine” in the form of sprawling government-owned real estate. The challenge, however, is to keep possession and maintain full control of its massive landholdings due to constant threats from illegal settlers and professional land grabbers.

Some of its major headaches, according to NHA insiders, are complex legal cases that threaten its hold on huge chunks of valuable land especially near Manila’s port area. Once considered “no man’s land”—being part of the old Smokey Mountain garbage dump—large chunks of NHA properties in the area are now commanding inflated prices. After all, the only available land big enough for commercial expansion are properties owned and controlled by NHA near Manila’s North Harbor.

Biz Buzz sources say that NHA officials must stop “looking the other way” while so-called “usurpers” illegally occupy NHA land. There were even reported incidents when “poseurs” claiming ownership of NHA properties threatened the agency’s personnel in the area. In fact, one group has allegedly “blockaded” a two-hectare parcel of the NHA property by putting hundreds of empty container vans that effectively blocked the government’s ingress and egress to and from Manila Bay.

How usurpers get away with these activities under the watchful eyes of NHA officials remain a big mystery. Concerned NHA workers are thus calling on President Duterte to help them protect and preserve government assets in danger of being dissipated or, worse, illegally taken over by greedy land grabbers. —DAXIM L. LUCAS

And the power plants say …

Power generation firms are, apparently, unhappy about the explanation of National Grid Corporation of the Philippines (NGCP) as to the reason for the power outage that struck Metro Manila and surrounding provinces in the evening of Nov. 15.

In particular, the firms behind the power plants that were initially blamed for the blackout are pushing back, saying that the NGCP’s backup systems took too long to kick in after a capacitor at the grid operator’s Bulacan substation conked out, thus forcing the power plants to shut themselves down as a precaution.

“Close coordination is also necessary in order for all participants to comply with provisions of the Philippine Grid Code, particularly with the Code’s prescribed time to clear disturbances in the transmission line,” said one official from the side of the generation firms.

As we reported in Biz Buzz last week, NGCP maintains a back-up system or an alternative channel where electricity continues flowing if part of the transmission system is busted. When the NGCP substation in Bulacan failed due to a fire almost a month ago, the back up system was supposed to kick in within a specific period of time as prescribed by the grid code, according to the generation firms (which feel aggrieved, apparently).

“During that Nov. 15 incident, however, the grid disturbance continued beyond this time limit, activating the protection systems—and forcing the automatic shutdown—of the power plants,” the official explained. “Power generation companies are reaching out to NGCP so they can altogether synchronize settings for their protection systems and NGCP’s back-up system as prescribed by the grid code.”

Go ahead, people. Talk this through … so we don’t have a repeat of the power outage during the holiday season when residential and commercial consumers are especially electricity-hungry. —DAXIM L. LUCAS