By Mary Ann Ll. Reyes Updated June 20, 2009 12:00 AM [ philstar.com ]
MANILA, Philippines – Metro Pacific Investments Corp. (MPIC), the local investment arm of Hong Kong’s First Pacific Co. Ltd., is reducing its stake in property developer Landco Pacific Corp. from 51 percent to 34 percent after it sold a portion of its shareholdings to AB Holdings Corp. for P203.3 million.
AB Holdings will acquire from MPIC 33.33 percent of the latter’s 51-percent shareholding in Landco, or about 17 percent of the total issued shares of Landco. With the sale, Landco will cease to be a subsidiary of MPIC.
Pursuant to MPIC’s partial divestment in Landco, the latter will also have to settle its loan to MPIC amounting to P500 million. As part of the agreement, AB Holdings will procure the repayment by Landco of its loan to MPIC.
AB Holdings of businessman Alfred Xerez-Burgos Jr. prior to the sale held 49 percent of the total issued shares of Landco. Following the sale, its stake will increase to a controlling 66 percent.
MPIC president Jose Ma. Lim said the payment of consideration will be made through a promissory note issued by AB Holdings in favor of MPIC. The note shall be issued with a face value equal to the share purchase price and with maturity of two months from the signing of the agreement, or on Aug. 19 this year.
AB Holdings has agreed to create a first ranking charge over the shares in accordance with a security agreement to be executed in favor of MPIC.
AB Holdings and Landco will settle the note by transferring assets owned by Landco and/or its subsidiaries in favor of MPIC or interested third parties.
MPIC explained that if there is agreement on the value of the Landco assets to be transferred, the transfer to MPIC will occur within two months of signing of the agreement.
However, if there is a disagreement on valuation, such Landco assets will be segregated for the benefit of MPIC but retained by Landco, which will sell the assets and remit the proceeds to MPIC no later than two years from signing of the agreement.
Where these segregated assets are sold by Landco for a price less than that indicated in the agreement, AB Holdings shall procure that Landco will set aside additional assets to top up the difference.
Moreover, where these assets remain unsold for a period of two years, MPIC has the right and
option to identify, and to require AB Holdings to procure the segregation and setting aside of other assets which are acceptable to MPIC, in exchange for the Landco assets that have not been disposed.
Assets utilized by AB Holdings and Landco to settle the AB Holdings note and the MPIC loan include shares in two Landco subsidiaries which own shopping malls, model houses, shares in a club, and lots in Landco projects.
AB Holdings will take assets from Landco as interest bearing advances due to Landco to settle the note.