Friday, June 5, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
CEBU CITY — Nearly a third of the P10-billion proceeds from the retail bond debut of Sy-controlled SM Investments Corp. will go to projects in Cebu.
Radisson Hotel Cebu, which will have a "soft" opening in October and fully operate in December, will get P2.5 billion while the planned SMX Convention Center Cebu will get P400 million to P500 million. A boutique hotel for travellers, one among 15 planned throughout the country, will also be put up near the SM mall here, said Jose T. Sio, SM Investments executive vice-president and chief financial officer.
Mr. Sio said a total of P2 billion would be allotted for the construction of these budget hotels over the next 10 years. The first will be built starting late this year in Bacolod, where he said "there’s a need for a good, small hotel for travellers." Aside from those in Cebu and Bacolod, budget hotels will also be built next to SM malls in Iloilo, Baguio and Naga, among others.
The convention center project near the existing SM City Cebu mall and Radisson Hotel Cebu is in the design stage. Construction is expected to start next year, with the center opening in 2011.
Other projects that will be financed by the bond issue are the Two E-Com Center, a sports arena, a Radisson Hotel as well as the expansion of the SMX Convention Center, all within the Mall of Asia complex in Pasay.
Eduardo V. Francisco, president of BDO Capital and Investments Corp., said demand for both the five-year and seven-year fixed-rate domestic retail bonds has been very strong.
"Demand is very strong so that it is no longer a question of whether we can raise P5 billion, but whether it’s going to be P9 billion or P10 billion," he said.
The Securities and Exchange Commission had approved a P5-billion fixed-rate bond issue, with an option to sell P5 billion more in case of oversubscription. Pricing will be set today and the bonds will be offered from June 8 to June 18, or eight business days.
This is the first retail bond issue of SM Investments, the listed holding company of the SM group with businesses in retail merchandising, mall operations, banking and finance, property development, and hotel and entertainment.
Meanwhile, SM Hotels expects a soft opening of the Radisson Hotel here in October. Radisson is the upscale full-service brand of Carlson Hotels Worldwide.
Marissa Fernan, SM vice-president for marketing in Visayas and Mindanao, said in a separate interview that key personnel led by general manager Grant J. Gaskin, a former managing director of the Radisson in Shanghai, have been appointed. Except for Mr. Gaskin, other key personnel are Filipinos.
Management is starting to interview local suppliers, she added. Homemade furniture will be used to furnish the hotel, providing Cebu’s beleaguered furniture industry a boost.
"Having Radisson here is a good thing for our furniture industry," Ms. Fernan said.
Radisson Cebu, which is positioned as an upscale business hotel, will have 400 rooms, a huge convention hall and the biggest Chinese restaurant in Cebu, Mr. Sio said. — Marites S. Villamor
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