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Andrew Tan’s move to consolidate property units gains ground

Posted on July 25, 2013 11:13:12 PM [ BusinessWorld Online ]
GLOBAL-ESTATE Resorts, Inc. has bagged regulatory approval to double its capital stock, the company said in a disclosure yesterday, paving the way for infusion of additional capital from affiliate Megaworld Corp.
Global-Estate said the Securities and Exchange Commission (SEC) on July 24 approved its bid to hike its authorized capital stock to P20 billion from P10 billion, consisting of shares with par value of P1 each.
The company had earlier said 2.5 billion shares from the increase will be subscribed to by Megaword at P2.26 apiece, giving Global-Estate around P5.56 billion in fresh funds.
It was not immediately known how much stake Megaworld will have in Global-Estate after the transaction.
Megaworld’s equity infusion in Global-Estate is part of the move by Alliance Global Group, Inc. Chairman Andrew L. Tan to consolidate his real estate assets under the flagship property unit Megaworld.
Last month, Megaworld acquired 1.2 billion more shares in mixed-use developer Empire East Land Holdings, Inc. at P1.05 per share for P1.26 billion.
Megaworld in June also acquired 100% of Suntrust Properties, Inc., for nearly P600 million. Suntrust has housing projects in Cavite, Laguna and Manila.
Megaworld, in a disclosure last month, said it “seeks to consolidate the real estate businesses of its affiliates under the Megaworld brand to better capitalize on real estate opportunities and capture the expected growth momentum of GERI (Global-Estate Resorts), ELI (Empire East Land Holdings) and Suntrust Properties within the next five years.”
Megaworld’s net profit stood at P1.82 billion in the first quarter, up by 15.19% from P1.58 billion in the same period last year.
In the same comparative periods, revenues grew by 16.43% to P8.15 billion from P7.00 billion, while cost and expenses increased by 18.96% to P6.33 billion from P5.32 billion.
Yesterday, shares of Global-Estate lost two centavos or 1.16% to close at P1.71 apiece from P1.73 on Wednesday, while those of Megaworld shed one centavo or 0.28% to end at P3.55 each from P3.56. -- Cliff Harvey C. Venzon            
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