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Holding firm raises funds for hotel

Posted on October 06, 2013 10:58:38 PM [ BusinessWorld Online ]

MJC INVESTMENTS, Inc. has issued more than a billion shares to new investors, the holding company said in a disclosure last Friday, amid plans to build a hotel in Manila.

The company last Thursday issued 875 million shares to an unidentified Hong Kong-based “strategic investor.”

On the same day, the firm separately issued 189.51 million shares to Grand Stallion Hotel and Amusement, Inc. (85.5 million), Grand Prosperity Hotels and Leisure Corp. (94.01 million) and Altesse Royal Holdings Corp. (10 million shares), the same disclosure said.

Officials were not immediately available to state the pricing of shares.

But based on the firm’s closing price of P4.25 apiece on Sept. 23 -- the last trading day before the Oct. 3 transaction -- the 1.064 billion shares were worth around P4.52 billion.

“The 189.51 million shares were additionally issued to comply with the instruction of the board to maintain a public ownership of at least 16%,” the company explained.

“If 875 million shares were the only ones issued, public ownership level will go down drastically below the 16% level.”

The Philippine Stock Exchange requires a 10% minimum public ownership level for firms to remain listed.

The additional shares were taken from the company’s increase in capital to P5 billion from P1.5 billion, a hike which the Securities and Exchange Commission approved last month.

The board of MJC Investments in June cleared subscription to 875 million shares by a “strategic investor from Hong Kong.”

The funds to be generated from the subscription “shall be used for the construction of the hotel and entertainment project in Sta. Cruz, Manila.”

MJC Investments plans to build a five-star hotel, tourism and entertainment hub on a 7,500-square-meter (sq.m.) site at the San Lazaro Tourism and Business Park in Sta. Cruz, Manila.

Upon completion, MJC Investments’ tourism and entertainment hub is expected to have 160 suites, a 1,000-person capacity ballroom, over 5,000 sq.m. of themed event spaces, and over 1,000 parking spaces.

The project is expected to commence operations by 2015.

The company reported some P8.3 million in losses in the first half on the absence of investment gains, a reversal from the P26.92-million net income posted in the same six months last year.

Shares of MJC Investments surged by 75 centavos or 17.65% to close P5.00 apiece on Friday last week from P4.25 apiece on Sept. 23. -- C. H. C. Venzon           
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