Posted on
July 18, 2013 10:48:26 PM [ BusinessWorld Online ]
THE DELAY in
the initial public offering (IPO) planned by Travellers International Hotel
Group, Inc. will not affect the ongoing multimillion-dollar expansion of
Resorts World Manila, a top company official said yesterday.
RESORTS WORLD
MANILA’s $600-million expansion can be funded by sources other than the planned
initial public offering, a top company official said.
“We are not pressured. We have funds
available to fund our projects,” Travellers President Kingson U. Sian told
reporters following the annual stockholders’ meeting in Quezon City of
Megaworld Corp., a sister company where he is director.
Mr. Sian said
Travellers has around P36 billion in cash to bankroll the expansion, which
according to him, was worth “around $600 million.”
Travellers
early this month told the Philippine Stock Exchange that it was putting off its
planned IPO “in view of the current market conditions.”
“We will wait
for the right time to do it (IPO),” he said yesterday.
“[It could
be] in September, October November, December -- if at all.
We are ready
because we have done the paperwork already.”
The company
planned to offer up to 1.57 billion shares at “up to P23.38” apiece with an
additional 235.98 million for the overallotment option.
Proceeds of
the IPO was intended to fund the expansion Resorts World Manila in Pasay City,
the firm’s flagship property development.
The IPO was
supposed to take place this month, but the company decided to defer the share
sale amid market volatility arising from uncertainty over when the US Federal
Reserve will start to scale back its massive bond-buying monthly stimulus.
Once the
company will have been listed, Mr. Sian said Travellers -- a joint venture
between Alliance Global Group, Inc. and Genting Hong Kong Ltd. -- will conduct
a “secondary offering,” but declined to provide details.
Mr. Sian said
the company may also borrow to fund the expansion .
“We can go to
the debt market or we can actually use bank lines,” Mr. Sian said, noting that
the company has a $300-million unused credit facility.
He said his
company is on track to complete at the Resorts World complex a 4,000-seater
convention center next year, the 200-room expansion of Manila Marriott Hotel in
2015, as well as opening of Hilton and Sheraton hotels in 2016 -- all in the
Resorts World complex.
The expansion
is expected to add 1,100 rooms to Resorts World Manila’s existing 1,200.
MEGAWORLD
BULLISH
Also
yesterday, a Megaworld statement quoted its Chairman Andrew L. Tan as saying
the property developer will likely hit this year’s target for reservation
sales.
“Based on our
performance, we are well on track to hit our target of P70 billion in
reservation sales for the year 2013,” said Mr. Tan, who is also chairman and
chief executive officer of parent conglomerate Alliance Global.
Mr. Sian, who
is also Alliance Global president and chief operating officer, said Megaworld’s
projected sales this year are 10.24% more than the P63.5 billion actually
earned last year.
“The group
will launch 25 projects this year -- 14 of the projects were already launched
in the first half,” Mr. Sian said, defining “launching” as the point the
company started selling units.
The 25
projects are equivalent to around 12,000 units, more than the 20 projects or
10,000 units launched last year, he explained.
The company
also expects rental income to double in the next five years, Mr. Sian said.
“We had
500,000 square meters of office space as of last year. We plan to double our
rental income from P5 billion last year to P10 billion in the next five years,”
he said, explaining this would also entail doubling of office spaces.
Alliance
Global booked a net profit of P4.91 billion in the first quarter, 18.31% more
than the P4.15 billion in the same period last year.
In the same
comparative periods, Megaworld’s net profit grew 15.19% to P1.82 billion from
P1.58 billion.
Yesterday,
shares of Alliance Global gained 20 centavos or 0.81% to close at P24.80 apiece
yesterday from P24.60 on Wednesday, while those of Megaworld added nine
centavos or 2.71% to P3.41 each from P3.32. -- Cliff Harvey C. Venzon
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