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Ayala Land no longer interested in FTI

By Dennis Gadil

[ ] February 22, 2010

Property giant Ayala Land Inc. (ALI) has backed out from the race to acquire and develop the sprawling Food Terminal Inc. (FTI) complex in Taguig City despite fresh signals from government that it was willing to slash its asking price of P13 billion.

"Ayala is no longer interested," Finance secretary Margarito Teves said on the latest blow to government’s effort to unload FTI and two other state assets early this year to plug a gaping deficit.

Teves could not give a reason for ALI’s sudden departure from the negotiating table but stressed that talks for a negotiated sale with other remaining bidders are on track.

The finance secretary disclosed that only two interested groups are left to contest FTI but declined to divulge their names.

ALI was previously perceived as the front-runner for the FTI privatization after being the first to express interest in the prime real estate.

During last year’s formal bidding, ALI did not submit a bid for FTI but stayed on until government resorted to a negotiated sale.

Teves earlier said a negotiated sale is quicker than a re-bidding.

The Department of Finance (DOF) announced late last year that it was in talks with three interested groups but did not disclose their names.

At least three giant property developers had expressed initial interest in the formal bidding but like ALI, snubbed the actual bidding process.

Aside from ALI, among the interested would-be bidders were Gokongweis’ Robinson’s Land Corp. (RLC) and Century Properties

Teves said they are now selling FTI for a much lower price of P9 billion to P10 billion.

The finance chief has indicated willingness to further reduce the price but was shy of volunteering the new amount.

"We’re not anymore confident with the property prices as we are before," he said.

Government originally set a floor price of P13 billion at the bidding for the property last year which ended up a failure.

Market watchers said the FTI’s price tag was way too high, noting last year’s slack in the property sector due to the impact of the global financial crisis.

To Ayala’s mysterious turn around, market watchers are now seeing a "drama" unfolding wherein ALI will be called in later as a "white knight" that would acquire FTI for a song.

The government earlier insisted that the P13 billion floor price was reasonable because based on the last valuation of the property, FTI was worth roughly P15 billion.

FTI is a 120-hectare agro-industrial commercial estate. It was originally built to be a food processing and consolidation center for agricultural products. It houses more than 300 small-to-medium scale companies engaged in different industries such as manufacturing, garments and electronics.

Of the 120-hectare property, the government is selling 103 hectares because the remaining 17 hectares is owned by the National Food Authority (NFA).

The FTI is one-third of the three-asset package put up for auction last year to generate at least P30 billion.

But poor market conditions prompted government to shelve tits privatization plans last year and make a go this year even if the current administration is about to exit in June.

The government’s stake at the PNOC-Exploration Corp. and the lease contract for Fujimi property in Japan are the second and third state assets, respectively, slated for the auction block.

The Fujimi property, which houses the Philippine embassy officeswill not be sold outright but be leased out to a private group under a 50-year contract which includes the construction of a multi-story office-commercial building.


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