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Starmalls to sell shares to United States-based investors

Posted on July 10, 2012 10:03:56 PM [ BusinessWorld Online ]

STARMALLS, INC. is set to raise funds from a share sale to United States-based investors, a disclosure to the Philippine Stock Exchange showed late Monday.

Following a meeting that day, the board of the Villar Group’s mall development arm approved the execution of a private placement and subscription transaction involving authorized but unissued stock held by Fine Properties, Inc., Starmalls’ principal shareholder, and subsidiary Manuela Corp. to qualified institutional buyers based in the United States.

No further details were made available. The offer price of the shares will be determined via a book building process following a roadshow abroad, Starmalls said.

UBS AG will serve as sole global coordinator, sole book runner, sole lead manager, and stabilizing agent for the transaction.

Further, the board also authorized the issuance of 2.35 billion preferred shares to Fine Properties for a total issue price of P23.5 million.

In a related development, Starmalls forged a deal with the subsidiaries of Villar-controlled Vista Land & Lifescapes, Inc. wherein Starmalls will serve as project manager of the Vista Land subsidiaries’ commercial properties.

The deal granted Starmalls the right of first offer and first refusal over these properties.

Starmalls, which operates six malls nationwide, is engaged in the business of development, establishment, operation and lease of commercial malls and office spaces. It opened its first mall in Las PiƱas City in 1979.

The mall operator went on to open three other malls between 1982 and 1996, but was forced into corporate rehabilitation following the 1997 Asian financial crisis.

Starmalls said that it was aiming to spend P15 billion over the next five years to bankroll its nationwide expansion plans, beginning with a mall in San Jose del Monte City, Bulacan, and to be followed by malls in Visayas and Mindanao, according to earlier reports.

Prior to the Villar Group’s consolidation of its mall development and real estate businesses on July 3, Starmalls was known as Polar Property Holdings Corp., a property firm originally incorporated in 1969 as Polar Mines and Development Corp.

Polar Property had been engaged in the development and marketing of medium-cost lots and condominiums in Manila, Muntinlupa City, Quezon City, and Cavite province.

According to earlier regulatory filings, Starmalls’ net income rose by 11.27% to P464 million in 2011 versus P417 million in 2010, while revenues grew by 7.99% to P298.60 million last year from P276.50 million in 2010.

This growth was attributed to rapid improvement in occupancy and rental rates, Starmalls said.

Similarly, the company’s malls division posted an occupancy rate of 70.0% in 2011, up from 65.0% in 2010, the same filing showed.

Shares of Starmalls plunged by 2.35% to P4.15 apiece yesterday from P4.25 at its previous close, while those of Vista Land shed 0.24% to P4.12 versus P4.13 on Monday. -- F. J. G. de la Fuente            

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