Vol. XXI, No. 244 [ BusinessWorld Online ]
Monday, July 14, 2008 | MANILA, PHILIPPINES
REAL ESTATE developer City & Land Developers, Inc. has sought corporate regulators’ nod to issue P200 million more worth of short-term commercial debts to finance its latest project.
In a document submitted to the Securities and Exchange Commission (SEC), the listed firm said it would issue the debts to finance project-related costs of its 39-storey Grand Emerald Tower in Ortigas, Pasig City.
Of the amount, P15 million will be used in the third quarter and another P50 million in the fourth quarter. The balance will be used in the second and third quarters of next year.
Last year, the SEC approved the company’s issuance of P500 million worth of the same type of debts so it could fund the Ortigas project and another residential project, the Pacific Regency, which was completed last year.
City & Land earlier said the real estate industry is now threatened by spiraling oil prices following its recovery from the Asian currency crisis.
It said the industry is characterized by a boom-and-bust cycle exhibited in the past couple of decades, when the industry went through years of robust growth following years of slowdown. It said the property sector is still headed for growth. City & Land’s principal activity is acquiring and developing land sites for residential, office, commercial, institutional and industrial uses.
A short-term commercial paper is an unsecured debt instrument that has a maturity of not more than nine months and is issued by a corporation typically to finance inventories and meet short-term debts.
As of March, City & Land had outstanding short-term commercial paper of P325 million and has registered revenues of P51.36 million from P62.20 million a year earlier.
The company traced higher revenues last year to the sale of Pacific Regency units.
"The company projects that revenues on sales of real estate will improve as the construction of Grand Emerald Tower advances," it told the commission.
Construction of the residential and commercial units started this year and is expected to be completed by June 2011. More than three-quarters of the units have been sold, Grand Emerald Tower broker Jessie Aning said.
He said about 700 units had been sold for P66,000 per square meter. — Kristine Jane R. Liu
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