Posted on July 13, 2014 09:59:07 PM [ BusinessWorld Online ]
THE REAL estate arm of the Ongpin group is now in better shape following the settlement of dispute with its former partner, UK-based Ashmore group, its president said.
“Alphaland Corp. is a much healthier company now because we have resolved the issue with Ashmore,” Alphaland President Mario A. Oreta said in an interview.
He noted that the P2.5 billion that Alphaland will receive from Ashmore as part of the settlement will help bankroll its most recent project, The City Club, in Makati City.
The City Club is an exclusive health and leisure facility at the Alphaland Makati Place featuring a fully equipped, “state-of-the-art” athletic complex, private meeting rooms and function halls, and eight specialty restaurants.
The upscale property developer is cleared to sell up to 3,000 club shares and Mr. Oreta said the company has already sold close to a thousand shares.
In December 2010, the initial offering for the membership shares were priced at half a million pesos each, appreciating to P1.5 million after three years.
Residential units at the Alphaland Makati, which automatically come with a membership at The City Club, will be turned over to the buyers by 2015.
“There are 500 [residential] units, and we have already sold 180,” Mr. Oreta said. “Our club is really for the younger guys who would like to belong to a club. It’s not a club for the rich and famous, we want people who earned their money to come here.”
The firm is also set to top off the Alphaland Makati by October this year, and will be turned over to buyers by December 2015.
“We are behind schedule but it’s manageable, it’s not too far away; because we had a redesign issue and we have also resolved our issue with Ashmore,” Mr. Oreta said, noting that while the company still has enough funds for now, it would have to turn to banks next year.
“Maybe another P2.5 or 3 billion. I don’t know the figures; all I know is that we still have to augment it by bank borrowing,” he said.
Alphaland was a joint venture between Mr. Ongpin -- the country’s 14th richest man -- and Ashmore. Their partnership turned sour after Mr. Ongpin’s group charged the latter with misrepresentation of a sale.
In a June 6 disclosure, Alphaland said it signed a definitive agreement with the Ashmore group to transfer some Alphaland properties in exchange of its departure from the company and P2.5 billion in cash.
The assets to be transferred are: Alphaland Makati Tower, Inc., Alphaland Marina Club, Inc. and Alphaland Marina Corp.; 50% ownership of the Alphaland group in Alphaland Bay City Corp., and 60% ownership in the Boracay Gateway project.
On the other hand, Alphaland will remain in possession of Alphaland Southgate Tower and Mall; Alphaland Makati Place, including The City Club; Alphaland Balesin Island Club; and Alphaland Baguio Mountain Lodge Homes.
Asked to comment on the asset transfer, Mr. Oreta said: “Of course we’re happy. We are.”
Alphaland’s net income rose 46.28% to P2.75 billion in the nine months to September 2013, from P1.88 billion a year earlier.
Revenue rose 34.62% to P530.91 million, while costs and expenses doubled to P667.28 million from P321.99 million.
Alphaland last traded on Jan. 20 at P17.48. -- Daphne J. Magturo