Posted on August 15, 2015 12:51:00 AM [ BusinessWorld Online ]
PROPERTY giant Ayala Land, Inc. said it is spending P5.6 billion to acquire a majority stake in the firm that owns Tutuban Center in Divisoria -- the site of the planned transfer station for the North South Railway Project -- in a bid to further boost its leasing business.
In a disclosure to the Philippine Stock Exchange on Friday, Ayala Land said it will subscribe to 2.5 million common shares of Prime Orion Philippines, Inc. (POPI), which is equivalent to a 51.36% stake.
"With the entry of ALI, POPI will be able to benefit from the expertise and resources of ALI and optimize the development of its property assets, especially Tutuban Center," POPI said in a separate disclosure on Friday.
Tutuban Center, which sits on a 20-hectare property, will be the site for the planned North-South Railway Project Transfer Station which will interconnect with the Light Rail Transit Line 2 West Station. Initial studies show this will result in additional 400,000 foot traffic per day in the Tutuban Center area.
The retail complex has a gross leasable area of about 60,000 square meters (sq.m.). Prime Orion had said it will expand the leasable area of Tutuban Center by 40,000 sq.m. from the current 60,000 sq.m. in the next two to three years.
"This acquisition is aligned with ALI’s thrust of expanding its leasing business," Ayala Land's disclosure read.
To accommodate Ayala Land's subscription, POPI's board of directors allowed the increase in its authorized capital stock to P7.5 billion from P2.4 billion.
"For this purpose, the Board shall call a special stockholders’ meeting to secure the approval of its stockholders on the proposed amendments," POPI said.
Shares in Prime Orion shed six centavos or 2.59% to end the week at P2.26 apiece, while those of Ayala Land lost 50 centavos or 1.32% to close at P37.50.