Monday, June 29, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
AB HOLDINGS Corp., the privately held firm with a significant stake in property developer Landco Pacific Corp., has hiked its authorized capital stock to P302 million from just P2 million to pay off a loan to an affiliate and in preparation for raising its stake in the high-end real estate company.
It assigned 90 million in the fresh shares to Alexcy Corp., owned by Alfred Xerez-Burgos, Jr., as payment for advancing the sum for future stock subscriptions, documents from the Securities and Exchange Commission (SEC) showed.
The cash infusion makes Alexcy the majority owner of AB Holdings, with Alfred S. Xerez-Burgos III and Jose Antonio S. Xerez-Burgos as the next biggest stockholders, each with 125,001 shares.
The AB Holdings board and shareholders approved the capital increase last September, while the SEC gave its go-signal to the plan last Tuesday.
Mr. Xerez-Burgos, Jr., AB Holdings president and Landco Pacific founder, said the capital hike was "in preparation for AB Holdings’ acquisition of more shares [from Metro Pacific Investments Corp.]."
"The increase in capitalization of AB Holdings by P300 million is to accommodate the increased equity participation of Alexcy Corp.," he added.
Listed holding firm Metro Pacific said in a June 19 disclosure to the stock exchange that its board of directors had approved selling a 17% stake in Landco Pacific to partner AB Holdings for P203.2 million.
Under the plan, AB Holdings will acquire 1.33 million common shares of Landco Pacific.
AB Holdings would also be required to pay the P500-million loan Metro Pacific extended to Landco Pacific last year to help pay for debts and projects.
The sale will boost AB Holdings’ stake in Landco Pacific to 66% and reduce the Manuel V. Pangilinan-led Metro Pacific’s stake to just 34%.
Metro Pacific, which owns hospitals, a water utility, and toll road operations, had long wanted to reduce its interest in Landco Pacific to focus on other businesses.
Last year, Landco Pacific’s sales dropped by 24.89% to P1.46 million from P1.94 billion, causing profits to plunge to P42.06 million from P353.99 million in 2007, documents from the SEC showed.
The company had said 17 projects including residential areas, commercial lots, resorts, farms, and memorial parks, with a total area of 10.15 million square meters, were under construction nationwide last year. — Don Gil K. Carreon
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