Vol. XXII, No. 85-A [ BusinessWorld Online ]
Saturday, November 22, 2008 | MANILA, PHILIPPINES
LISTED CITYLAND Development Corp. sought regulatory approval on Friday to sell to the public short-term commercial debt worth P900 million to finance three projects and pay off maturing loans. The commercial debt will pay 6% interest and mature in a year.
The property developer told the Securities and Exchange Commission (SEC) it planned to use P550 million of the proceeds for three projects in Manila. The balance will be used to settle outstanding debt as of June 30.
Cityland will spend P200 million for the 37-storey Makati Executive Tower III and P140 million for the 39-storey Manila Executive Regency, which are mixed-use buildings. The company will also spend P160 million for the seven-storey residential condominium Mandaluyong Executive Mansions III.
Cityland said the first two structures are almost halfway complete as of June 30, while the third one had just started. It said the three buildings would cost P1.71 billion.
Cityland said the proceeds of the sale would not be used to acquire property within the next twelve months or to compensate any officer, director, employee or shareholder.
The real estate firm said it would renew its maturing loans if it does not raise the money from the debt sale, adding that it could still borrow up to P2.5 billion from banks.
Cityland posted flat profit growth in the third quarter as higher wages, insurance and advertising costs offset sales growth.
Net profits stood at P158.77 million, even as revenues went up by more than a tenth to P667.3 million from a year earlier. Its January to September net income rose by 7% to P386.1 million from a year earlier even as revenues fell by 6% to P1.68 billion. — Don Gil K. Carreon
