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Condo builder set to borrow P200 million for Ortigas project

Wednesday, June 1, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]


LISTED CONDOMINIUM builder City & Land Developers, Inc. is seeking regulatory approval from the Securities and Exchange Commission (SEC) to sell P200 million worth of short-term commercial papers to partly fund a project in Ortigas.

City & Land said the proceeds would be spent on the Grand Emerald Tower, a 39-storey mixed-use building in Ortigas, documents submitted to the regulator showed.

City & Land plans to sell 60% of the short-term commercial papers to the general public, 30% to institutional investors, and the rest to local small investors.

The company again requested for exemption from getting the services of underwriters, saying it had been previously successful in selling commercial papers.

City & Land said the minimum amount of commercial papers that can be purchased is P300,000, with a term not exceeding 365 days. The papers will pay a fixed interest based on prevailing market rates at the time of the issuance.

The property developer, which is led by businessman Stephen C. Roxas, said it expects net proceeds of P198.75 million to be spent in four equal tranches starting on the fourth quarter.

"If proceeds are substantially less than maximum proceeds, the company will just opt to renew maturing obligations from existing financial institutions," the firm said.

City & Land said that as of March 31, it had outstanding loans worth P290.85 million.

The condominium builder is part of the Cityland group, a 30-year-old property firm that has built mixed-use towers in Makati, Mandaluyong, Pasig and Manila; affordable houses in Tagaytay, ParaƱaque and Pasig; and Bulacan, Cavite and Tagaytay.

In the first quarter, City & Land’s profits dropped to P4.04 million from P17.59 million last year, as revenues only reached P61.05 million from last year’s P84.22 million with projects still in the early stages of construction. — D. G. K. Carreon

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