posted May 15, 2016 at 11:35 pm by Jenniffer B. Austria
GT Capital Holdings Inc. of tycoon George Ty will invest an additional P8.76 billion to increase its stake in mass housing developer Property Company of Friends Inc., or Pro-Friends, to 51 percent.
GT Capital said it planned to invest P6.2 billion to raise its stake in Pro-Friends to 42 percent by the second half of 2016 from the current 22.68 percent that required an investment of P7.24 billion.
GT Capital will further invest P2.56 billion to increase its stake in the mass housing developer to 51 percent by the first quarter of 2017.
“Total price for the 51 percent would be P16 billion. So we initially paid up P7.24 billion for the 22.68 percent stake. Then tranche two will be another P6.2 billion and the balance that would bring us to 51 percent would be first quarter next year,” GT Capital president Carmelo Bautista said.
GT Capital said funding for the investment would come from internally generated funds and some short term debt.
GT Capital’s investment in Pro-Friends will stay at the holding level as the company has no immediate plans of consolidating Profriends under property unit Federal Land Inc.
“Eventually, once we identified synergies between the two separate businesses, the intention is to consolidate but not in the near future,” Bautista said.
Bautista said Pro-Friends this year would push through with plans to roll out 500 units monthly or 6,000 new homes this year.
“There is backlog in the affordable housing sector. It’s affordable and it’s large segment so we can build as many as possible,” Bautista said.
Federal Land will also launch seven new projects this year, mostly residential developments covering the high-end and mid market
Established in 1999, Pro-Friends is today one of the country’s leading property developers, focusing on the low-cost and economic housing segments, and retail and office space leasing.
It has built and sold over 36,000 affordable homes in the provinces of Cavite and Iloilo. Its flagship and largest project is Lancaster New City, which spans the areas of Kawit, Imus, and General Trias in Cavite province.
Pro-Friends in 2014 had planned to conduct an initial public offering to raise as much as P7.7 billion in proceeds.
The company, however, did not push through with the IPO and instead opted to tap GT Capital as a strategic investor.