Monday, September 14, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
CONDOMINIUM BUILDER Cityland, Inc. is seeking regulatory approval to sell P900 million worth of short-term commercial papers to pay off maturing loans and partly finance a project in Manila.
In a registration statement submitted to the Securities and Exchange Commission (SEC) on Wednesday, the company said P550 million of the proceeds from the offering would be used to pay loans, while P50 million more would be spent on interest payments.
Cityland said the balance would be set aside for the development cost of The Manila Residences, a 39-floor, mixed-used building on Taft Avenue.
The property developer said the money for the project would be spent in 2010. The project was almost three-fifths complete as of June 30, and would cost a total of P459.6 million to build.
The company plans to sell 70% of the commercial papers to the general public, 30% to institutional buyers, and the rest to small investors. The sale of the debt papers will be distributed evenly over four quarters next year.
The condominium builder again requested for an exemption from getting an underwriter, citing its record of having sold commercial papers on its own in previous years.
The commercial papers, which will be redeemable in 365 days and pay interest based on prevailing rates at the time of the offering, will be sold for a minimum of P300,000.
Cityland said if proceeds of the commercial paper sale fall short of expectations, the company would just borrow from financial institutions or banks, where it has P2.36 billion worth of credit lines available.
As of June 30, the company has sold P716.45 million worth of commercial papers out of P1.15 billion registered in November 2008. Total outstanding loans for the period stood at P1.18 billion.
During the period, the firm recorded earnings of P296.92 million on revenues of P1.33 billion.
The firm is part of the Cityland group, which includes listed firms Cityland Development Corp. and City & Land Developers, Inc. — Don Gil K. Carreon
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