Posted on 07:15 PM, September 03, 2010 [ BusinessWorld Online ]
Property developer City and Land Development, Inc. has secured approval from the Securities and Exchange Commission (SEC) to register P200 million worth of short term commercial papers to finance condominium projects.
City and Land, a member of the Cityland group of companies, said in its registration statement it would use the money to partly finance two projects, the Grand Emerald Tower and Manila Residences Bocobo.
Grand Emerald Tower is a 39-storey office, residential and commercial condominium in Ortigas Center, Pasig while Manila Residences Bocobo is a 34-storey office, residential and commercial building in Ermita, Manila.
As of March 31, Grand Emerald Tower is 76% complete while Manila Residences Bocobo has reached 12%, the company said in its statement. The Ortigas tower needs a total of P400 million while the Manila tower requires P590 million to finish construction, it added.
Grand Emerald Tower is expected to be completed in June 2011 while Manila Residenes Bocobo is expected to be finished by June 2013.
City and Land warned investors of risks needed to be considered before buying the commercial papers. The company noted that it has a "moderately aggressive debt level" and that the fair value of future cash flows may fluctuate because of changes in market prices. It also noted strong competition from other condominium developers.
However, the company said it was undertaking preventive measures to manage risks. Among them are conducting assessments of the economic and political situation, monitoring of developments in the property industry as well as latest technologies in the construction industry, improving marketing strategies, and updating the skills of personnel.
As of August 17, the company had an outstanding issuance of P161.4 million worth of short-term commercial papers. Short-term commercial papers are promissory notes with a term of less than a year.
The company reported P129.5 million in net income for 2009. It earned P29.69 million in the first quarter. -- J. J. A. Cerda
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