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GSIS rebuffed anew on FTI


[ ] March 1, 2010

The Department of Finance (DOF) has rejected the latest offer of the Government Service Insurance System (GSIS) to acquire the Food Terminal Inc (FTI) property for P7 billion, way below its original asking price of P13 billion.

Finance Secretary Margarito Teves said the Privatization Management Office (PMO) deemed the GSIS offer as "relatively low."

Teves said he has directed the PMO to formally respond to GSIS and "look for a better price."

The revived offer of GSIS was lower than the latest government asking price of P9 billion to P10 billion.

Teves said the PMO will proceed with its negotiations with two remaining interested bidders after perceived front-runner giant property developer Ayala Land Inc. (ALI) backed out.

Winston Garcia, GSIS president and general manager, earlier threatened to sue DOF and PMO for not acting on the offer while holding negotiations with private groups.

Garcia described the "snub" as a discourtesy to a fellow government agency.

GSIS was among the first to show interest in the property but lost interest toward the middle of last year.

It revived its interest late last year by submitting the P7 billion offer, P1 billion more than its 2007-2008 offer of P6 billion when the DOF was asking for P15 billion.

Teves has repeatedly said government prefers to sell to a private group.

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

Market watchers said the bidding failed because property developers wanted the government to lower the price to below P10 billion, branding the P13 billion floor price as too high.

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

Aside from GSIS and ALI, Gokongweis’ Robinson’s Land Corp. and Century Properties have also expressed interest in the property.

The government is eyeing the first semester sale of the FTI property along with two other state assets, the Fujimi property in Tokyo and the 60 percent stake in PNOC-EC, to meet its privatization goal of P30 billion.


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