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Megaworld pledges to buy unsold Empire East shares

Posted on July 18, 2012 09:44:34 PM [ BusinessWorld Online ]

MEGAWORLD CORP., the middle-income property unit of business tycoon Andrew L. Tan, has pledged to buy shares of subsidiary Empire East Land Holdings, Inc. that will be left unsold after an upcoming stock rights offer.

“In connection with the one for four preemptive stock rights offering of Empire East, Megaworld, as the major and controlling stockholder of Empire East, has committed and undertaken to subscribe to its rights offer entitlement and to any rights offer shares not taken up by other shareholders,” the disclosure read.

“This will ensure that all 2.6 billion rights offer shares will be subscribed,” Megaworld added.

As of end-June, Megaworld held a 47.28% stake in Empire East, equivalent to 5.02 billion shares.

Empire East shareholders last month approved the preemptive stock rights offer, wherein the company will offer one new share for every four shares held by existing stockholders, in a bid to raise funds for land banking, project development, and general corporate purposes.

Proceeds from the stock rights offer, expected to amount to approximately P2.6 billion, will be used to fund Empire East’s estimated P3-billion capital budget this year.

The stock rights offering is expected to commence sometime in the third quarter, earlier reports showed.

Earlier this week, Empire East inked a joint venture with the Japan-based Okada Group for the development of a P45-billion upscale condominium complex in the Bagong Nayong Pilipino Entertainment City, firming up its foray into luxury property development.

The developer is also one of many firms interested in the 120-hectare, state-owned Food Terminal, Inc. agri-indsutrial complex in Taguig City that is slated for bidding next month, having floated a P14-billion unsolicited offer for the property last year.

Empire East’s first-quarter net income rose by 48.13% to P34.71 million versus year-ago levels, supported by an uptick in the company’s real estate sales.

Total revenues went up by 23.88% to P700.08 million, while costs and expenses expanded by 24.52% to P672.33 million.

Megaworld shares plunged 4.87% to P2.15 yesterday, while those of Empire East fell by 3.37% to 86 centavos each. -- Franz Jonathan G. de la Fuente        
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