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Finance in advanced negotiations to sell FTI

by Elaine R. Alanguilan
[ ] August 30, 2011

The government is close to clinching a deal with a developer over the privatization of the 103-hectare property owned Food Terminals Inc. in Taguig City, Finance Undersecretary John Philip Sevilla said over the weekend.

“Yes,” Sevilla said when asked if the transaction was in the advanced stages.

“It would happen this year.”

He declined to name the company when asked by reporters.

The previous administration wanted to sell the property at a minimum bid price of P13 billion. The bidding at that time failed twice due to lack of investor interest amid poor market conditions. This prompted the previous government to lower the minimum bid price to between P7 billion and P9 billion.

Sevilla, however, said the government would stick to the original P13-billion floor price for the property when the new administration announced plans to pursue the privatization.

Several big developers such as Ayala Land Inc., SM Group, Robinsons Land Corp., Megaworld Corp. and Filinvest Land Inc. have signified their interest to bid for the property.

“Just wait,” Sevilla said, when asked if the P13-billion floor price was met.

Sevilla said earlier the government was pursuing the privatization of FTI later this year to help boost economic activity through new private investments.

Weaker public spending, in addition to sluggish global trade, has limited the economy’s growth in the first three months of the year to 4.9 percent.

The government is hoping that investments on the complex’s development would generate economic activity, including much-needed new jobs.

The 103-hectare FTI complex is being sold on an as is, where is basis.

It is the biggest remaining block of undeveloped property in the vicinity of the airport and the Bonifacio Global City, whose earlier privatization made it among the premier commercial and business districts in the country.

“In terms of raising revenues, the privatization of FTI is not urgent but in terms of boosting the economy, yes, it is important that it is privatized this year. About 75 percent of the property is currently idle…somebody else could be investing there,” Sevilla said in an earlier interview.

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