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MPIC subscribes new shares in real-estate firm

    Published : Monday, January 02, 2012 00:00 [ ]

THE local unit of Hong Kong-based First Pacific Co. Ltd. has subscribed to new shares in Landco Pacific Corp., which recently secured regulatory approval to hike its capitalization.

Documents from the Securities and Exchange Commission showed that Landco raised its authorized capital stock to P1.44 billion from P820 million with the addition of P242.95-million worth of common shares and the creation P379.66-million worth of preferred shares.

Metro Pacific Investments Corp. subscribed to the increase in preferred shares, through the payment of P50 million in cash and the conversion of P329.66-million worth of liabilities into equity.

“Based on the documents submitted, the cash payment amounting to P50 million represents fresh and additional capital while the amount of P329.66 million liabilities being converted into equity represents valid claim of the subscriber against the applicant corporation,” the SEC said.

The subscription was pursuant to an agreement MPIC signed on August 2010 with AB Holdings Corp., Landco and a third party individual, which settled the conglomerate’s loan to the property firm including advances totaling P554.7 million. The remaining P225 million was settled in cash.

The preferred shares are non-voting and have a 10-year redemption period. MPIC will also receive preferential cash dividends of 10 percent per annum.

At the option of MPIC, the shares may also be convertible to Landco common shares at a conversion price of P156.27 per common share, if Landco undertakes an initial public offering, AB Holdings gives notice of its intention to sell or dispose all or a portion of its shares pursuant to its obligations, or Landco issues additional common shares.

Following a strategic review of the company’s businesses in 2008 and its focus on infrastructure, MPIC decided to divest its 51 percent interest in Landco. The conglomerate sold 17 percent of its ownership in the property firm in June 2009 and another 15-percent stake a year later, reducing its interest in Landco to 19 percent.

In the first nine months of 2011, MPIC’s consolidated core net income grew 34 percent to P3.95 billion in the nine months from P2.94 billion in the previous year because of the stronger contributions of its water utility and power generation business.

Its shares added 0.08, or 2.23 percent to P3.66 each on Thursday.

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