MANILA, Philippines - Property giant Ayala Land Inc. (ALI) has bagged a deal to develop the 60-hectare property in Valenzuela City that used to house the country’s biggest fully-integrated plastic manufacturing complex.
In a disclosure to the Philippine Stock Exchange, Philippine Estates Corp. (PhilEstates), the property development arm of the Gatchalians, said it will enter into an agreement with ALI subsidiary Avida Land Corp.
“The board of directors of PhilEstates authorized the development through joint venture of the corporation’s real estate property located in Brgy. Calumay, Valenzuela City,” the company said.
The 60-hectare Plastic City property will be developed into a residential, business and/or commercial condominium and/or subdivision project with Avida Land.
The board also authorized management to negotiate and finalize terms of the joint venture, PhilEstates said.
ALI is operating under five major brands – Ayala Land Premier for the high-end segment, Alveo Land for the middle-income segment, Avida Land for the “affordable” market, Amaia Land for economic housing unit and Buena Vida for socialized housing.
For this year, ALI plans to roll out 67 new projects with a potential sales value of around P90 billion, and has earmarked a record P37 billion for capital spending.
The bulk of the new developments will comprise 50 residential projects, equivalent to about 25,000 units across its five brands to cater to the different economic segments, or 25 percent more than the 20,000 units rolled out a year ago.
Last month, ALI announced it is in discussions with the Gatchalian Group who owns the sprawling Plastic City. The Gatchalian Group has long been searching for a strategic partner to convert its huge estate in Valenzuela into a modern mixed-use complex to maximize the untapped potential of the property.
The property used to house the warehouse facilities of Plastic City Industrial Corp. and Philfoods Inc. until the two firms ceased operations in 2002 due to losses.
In a filing with securities regulators, the Gatchalians, through Wellex Industries Inc., said the property is seen to contribute significantly towards the group’s maximum operation and financial position due to its encouraging prospect.
“Management is continuously in search for a reliable joint venture partners who have the means to continue its operations,” Wellex said.
In a separate disclosure, ALI said its board of directors approved the company’s plan to raise P1.3 billion through the sale of preferred shares.
For every share held as of June 4, the public can buy one preferred share at 10 centavos apiece. Offer period for the voting shares will be on June 18 up to June 22, 2012.
In February, ALI said it will issue P1.3 billion worth of preferred shares to comply with a Supreme Court ruling on foreign equity limits.
The capital restructuring exercise is designed to meet the regulatory requirement on Filipino ownership following the Supreme Court’s recent ruling that non-voting shares do not count as equity when computing for a company’s Filipino ownership level.
ALI’s profits surged 31 percent to P2.1 billion in the first quarter as revenues climbed 17 percent to P12.4 billion due to double-digit increases across all five brands.