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Saturday, June 30, 2012

Stock News 2012: Ortigas family nixes SM offer, partners with Ayala

English: Picture of the Greenhills Shopping CenterEnglish: Picture of the Greenhills Shopping Center (Photo credit: Wikipedia)
The Ortigas family has exercised its right of first refusal over British banking giant HSBC’s 34-percent stake in Ortigas Holdings Inc., dealing a major blow to the Sy family’s plan to take over the firm that owns the 16-hectare Greenhills shopping complex.

Ayala Land Inc. (ALI) announced yesterday a strategic alliance with the group led by Ignacio R. Ortigas, allowing it to participate in the development of various properties owned by the Ortigas group.

The Ortigas family has matched the SM Group’s offer to acquire HSBC’s stake, reportedly amounting to P11 billion.

SM Investments Corp. confirmed the transaction.

“We were informed that the existing shareholders of Ortigas Holdings, which consist mainly of the Ortigas family, exercised their right of first refusal on the shares owned by HSBC,” SMIC said.

The SM Group was initially hoping to finalize a deal to take over the property holding firm of the Ortigas family in the first half this year.

In April, SMIC said it was getting nearer to its bid to acquire a controlling stake in Ortigas Holdings, pointing out financing was ready and that it was just waiting for final instructions.

The deal would have allowed the SM Group to corner the lion’s share of the retail market in the burgeoning Ortigas-Pasig-Mandaluyong area.

ALI said it would allocate an initial amount of P15 billion for this purpose. The development project will include plans for residential, office, retail, and hotel components.

ALI said the partnership in line with the group’s strategy, which includes expanding its operations in key growth centers in Metro Manila. ALI intends to contribute its expertise in building large scale, mixed-use developments to this partnership.

The strategic alliance is expected to generate significant synergies with the other ALI integrated mixed-use communities in key business districts such as Makati, Bonifacio Global City and Quezon City.

“We are privileged to be a part of this strategic alliance. We welcome the opportunity to participate in the development of these key areas in Metro Manila,” said ALI president Antonino T. Aquino. “Many of our successful developments such as the Ayala Alabang, Cebu Park District, Bonifacio Global City, Trinoma, Nuvali, Abreeza Davao, and Centrio Cagayan de Oro were built on strong partnerships with various groups.”

Ortigas & Co. currently owns strategic land bank areas in the Ortigas Business District, Greenhills Shopping Center, Tiendesitas in Frontera Verde, Circulo Verde and Capitol Commons.

The Ortigas district, which encompasses at least 100 hectares, is home to many shopping malls like Robinsons Galleria, Shangrila, Megamall, Podium and St. Francis Square.

Megamall, developed and operated by shopping mall giant SM Prime Holdings Inc., sits on 18 hectares of prime land with a total floor area of about 348,000 square meters. It is currently undergoing renovation and expansion with the three- hectare parking lot in front of EDSA being converted into a commercial and office space for business process outsourcing companies.

The expansion will give Megamall an additional 100,000 sqm of gross leasable area and will make it the largest shopping mall in the country, topping SM City North Edsa.

The Ortigases, whose historic roots date back to the 300-year Spanish colonial rule, are among the largest landowners in the country. They developed upscale residential subdivisions Valle Verde and Wack-Wack as well as the 77-unit Luntala townhouse project within Valle Verde 6.

Aside from the Greenhills Shopping Center, the group’s retail portfolio also includes the 18-hectare Tiendesitas in Pasig.

Ongoing projects by the Ortigas group include Circulo Verde, a 15-tower residential development located on a 12-hectare property in Calle Industria in Bagumbayan in Quezon City and the P25 billion Capitol Commons, which will rise on a 10-hectare property, which was previously occupied by the Rizal Provincial Capitol.


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Friday, June 29, 2012

Stock News 2012: Metro Pacific divests Rockwell Land stocks

Photo of MannyPhoto of Manny (Photo credit: Wikipedia)
The Metro Pacific Group of business titan Manuel V. Pangilinan has divested in upscale property developer Rockwell Land Corp., which is not part of the conglomerate’s core business.

In a joint statement to securities regulators yesterday, Metro Pacific Investments Corp. (MPIC) and First Philippine Holdings Corp. (FPHC) said Beacon Electric Asset Holdings Inc. has transferred around 1.5 billion shares in Rockwell worth roughly P3.1 billion to Lopez-owned FPHC and FPHC Pension Fund.

“Beacon transferred to FPHC 1.3 billion shares, as additional consideration for the 74.7 million Manila Electric Co. (Meralco) common shares acquired by Beacon from FPHC pursuant to the exercise of a call option on such shares on March 30, 2010,” the companies said.

“The consideration of the transfer of the 1.3 billion shares to FPHC is P2.01 per share or a total consideration of P2.613 billion,” they added.

The shares were crossed yesterday at the Philippine Stock Exchange.

Beacon secured a stake in Rockwell after Meralco divested its 51 percent stake in Rockwell by declaring it as property dividends. It resulted in FPHC owning a 52-percent stake in the high-end property firm.

Beacon, equally is owned by MPIC and PLDT Communication and Energy Ventures Inc., also transferred 84.546 million shares worth P169.938 million to FPHC as instructed by First Philippine Utilities Corp. (FPUC).

FPUC, a subsidiary of FPHC, retained its rights over the shares despite the MPIC group’s purchase of 30 million Meralco common shares, Beacon said.

Furthermore, Beacon sold 52.787 million additional Rockwell shares to FPHC valued at P2.01 apiece or a total of P106.1 million.

In 2009, FPHC sold 223 million Meralco shares worth P20.07 billion to the Pangilinan-led group. The Lopez-led holding firm sold an additional 74.7 million Meralco shares, or 6.6 percent of Meralco, in March 2010 for P22.41 billion.

Lastly, Beacon sold 87.953 million shares to FPH Pension Fund for P2.01 apiece or a total consideration of P176.787 million.

MPIC unloaded its shares in Rockwell as the company is not a core business of the conglomerate. Specifically, MPIC is into toll roads (Metro Pacific Tollways Corp.), power distribution (Meralco), water utility (Maynilad Water Services Inc.) and hospitals.

In May, Rockwell listed 6.23 billion common shares in the local bourse by way of introduction as a result of a Meralco’s property dividend.

Rockwell earned P915 million last year, up 14 percent from P801 million a year earlier on the back of a 26 percent jump in revenues to P6.2 billion. Revenue growth was driven by residential sales due to higher booking and construction completion in 2011 from ongoing projects.

Rockwell is looking to breach the P1 billion mark in terms of net income this year. Revenues are forecast to grow to P7.4 billion, an increase of 20 percent from the year before.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=821974

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Stock News 2012: ALI launches P30-B One Bonifacio High St

English: Fort Bonifacio in Taguig CityEnglish: Fort Bonifacio in Taguig City (Photo credit: Wikipedia)
Ayala Land Inc. (ALI) is aggressively building up its presence in Bonifacio Global City with the launch of a P30-billion premium mixed-use block called One Bonifacio High Street – its biggest investment in one single area to date.

In a briefing yesterday, ALI president Antonino Aquino said they are rigorously expanding in Bonifacio Global City to further strengthen the company’s leadership in developing large-scale, mixed-use urban hubs in the country.

“The aggressiveness is a result of the economy. We have never seen the economy to look this bullish and we want to be in step,” Aquino said.

He said One Bonifacio High Street will soon be home to the new headquarters of the Philippine Stock Exchange and will banner an all suite-residential tower, a high-end lifestyle center as well as a five-star Shangri-La Hotel.

Aquino said half of the estimated development cost for One Bonifacio High Street will be equally divided among ALI and its partners Evergreen Holdings of the Campos family and Fort Bonifacio Development Corp. The other half will be shouldered by the Shangri-La Group, which is building a 577-room Shangri-La Hotel as well as 97 serviced apartments and 99 luxurious residential condominium units.

The investment will be made over a four-year period, he said.

Around P3 billion to P5 billion has been earmarked for the development of the unified stock exchange which is targeted for completion by late 2016 to early 2017. Another P2 billion to P3 billion will be spent for the retail shops.

For the residential component, ALI, through subsidiary Ayala Land Premier, is pouring in P9.9 billion for the 63-story iconic tower, The Suites, which will be the first and only all-suite residential development in the block and is probably the group’s most expensive project in the area, selling at P180,000 per square meter.

Jose Juan Jugo, Group head for ALP, said sales of The Suites have been spectacular with only three units left within 96 hours or since it was launched last June 24. Turnover of the units is slated to begin in the fourth quarter of 2018.

The Suites will house 298 residential suites and limited edition sky villas with sizes ranging from 136 sqm to 430 sqm.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=821972

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Wednesday, June 27, 2012

Stock News 2012: Belle in casino talks with Aussie, Macau tycoons

English: Gold Bars At Grand Emperor Casion in ...English: Gold Bars At Grand Emperor Casion in Macau (Photo credit: Wikipedia)
Belle Corp., a leisure developer and gaming firm controlled by the family of the country’s richest man Henry Sy, is in discussions with Melco Crown Entertainment Ltd., a the casino operator run by Australian billionaire James Packer and Macau gambling tycoon Lawrence Ho, for a possible casino venture in the Philippines.

Belle vice chairman Willy N. Ocier said talks are still ongoing and nothing final has been agreed.

The Australian Financial Review newspaper reported that Packer and Ho were set to sign a deal with the Sy family to expand their casino empire into the Philippines.

When asked whether the deal would involve an investment by Melco Crown in the venture, Ocier said: “We’re not sure about that. We’re still talking.”

Belle is building Belle Grande Manila Bay, a $1-billion integrated entertainment resort that has attracted interest from some of Asia’s richest tycoons.

Packer was earlier reported to be increasingly turning to casinos to expand his business as he aims to create a Pan-Asian gambling emptire. His company, Crown Ltd., owns about a third of Melco Crown, which owns fast-growing casinos in Asia’s gambling capital of Macau.

Packer and Ho earlier signified their interest to make their presence felt in the Philippines, which is seen to become a major gambling destination similar to Macau and Singapore.

Located at the more than 100-hecare Entertainment City along Roxas Blvd., Belle Grande Manila Bay will have a gross floor area of more than 25 hectares when it opens its doors to the public in 2013. The complex will house 1.8 hectares of gaming space with around 350 gaming tables and 1,900 slot machines.

The main podium will feature six luxury hotel towers with more than 800 rooms under three brands of five-star and six-star quality.

The resort complex will also contain more than two hectares of retail and dining operations. The mall, with a gross floor area of 60,000 to 80,000 square meters, is expected to be completed within 12 to 18 months.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=821627

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Tuesday, June 26, 2012

Stock News 2012: Meralco to source power from SMC unit

PowerPower (Photo credit: Chewy Chua)
Manila Electric Co. (Meralco) will secure part of its electricity requirements from a subsidiary of diversified conglomerate San Miguel Corp. (SMC).

“The company’s board of directors, in its regular meeting yesterday, approved the grant of authority for the company to enter into a power supply agreement with San Miguel Energy Corp. (SMEC),” Meralco told the local bourse.

However, the company has yet to specify how much electricity it will buy from the SMC subsidiary.

In February, the country’s largest power distributor said it is in talks with SMC for a power supply agreement to ensure continued supply of power to its customers.

Early this year, Meralco signed a seven-year supply deal with Therma Luzon Inc., a subsidiary of Aboitiz Power Corp. Meralco will source 350-megawatts (MW) of electricity from Therma Luzon’s 764-MW coal-fired plant in Quezon province.

Meralco wants to secure electricity from SMEC, which holds the independent power producer contract administrator license for the 1,200-MW Sual coal plant in Pangasinan.

The power distributor is locking up power supply deals amid expectations of higher electricity demand from its customers.

Meralco added 40,000 new customers in the first quarter, bringing the total to a record 5.07 million as of end-March. Meralco is indirectly controlled by Hong Kong-based First Pacific Co. Ltd. and partly owned by SMC.

Meralco, through unit Meralco PowerGen Corp., is building a 600-MW coal-fired power plant at the Subic Bay Freeport Zone in Zambales in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp.

It is targeted to start commercial operations in 2015, increasing available electricity in the Luzon grid.

http://www.philstar.com/Article.aspx?articleId=820919&publicationSubCategoryId=66

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Monday, June 25, 2012

Stock News 2012: First Pacific eyes agri ventures, with focus on sugar, bananas

Hong Kong-based First Pacific Co. Ltd. is looking to make a push into Philippine agriculture with particular focus on sugar and bananas to create new revenue streams.

First Pacific managing director and chief executive officer Manuel V. Pangilinan said the group is excited about the investment opportunities in agriculture even as the sector’s contribution to gross domestic product remained insignificant.

Pangilinan said the group has commenced negotiations with banana growers and is hoping to partner with someone that has a good distribution capability to help sell Philippine bananas.

The Philippines is currently the world’s second-biggest exporter of bananas next to Ecuador. It is also a major banana supplier to Japan, China, South Korea and New Zealand.

The prospective growth for the industry given the country’s abundant natural resources which include 29.81 million hectares of agricultural land, and 5.7 million hectares of arable land.

Pangilinan said the group is also keen on sugar production, which is forecast grow by 37.5 percent to 2.86 million tons by 2015 or 2016.

With the volatile global demand for almost every plantation crops, the sector is seeing major players increasing their participation and new players entering the market.

In the Philippines, First Pacific is present in the telecommunications, power, tollroads, mining and healthcare services and water distribution sectors.

Building on its 2011 best-ever performance, the group through Philippine flagship Metro Pacific Investments Corp. will continue investing in new tollroads and water distribution outside its existing franchise area.

http://www.philstar.com/Article.aspx?articleId=820592&publicationSubCategoryId=66

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Stock News 2012: Manila Water gets top credit rating

Manila Water CompanyManila Water Company (Photo credit: Wikipedia)
Ayala-led Manila Water Co. Inc. obtained the highest issue credit rating of PRS Aaa from Philippine Rating Services Corp.

A triple A credit rating is deemed “of the highest quality with minimal credit risk” and that the borrower’s capacity to meet financial commitment on the obligation is extremely strong.

PhilRatings is the only domestic credit rating agency in the country accredited by both the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission.

In assigning the rating, PhilRatings took into account Manila Water’s proactive management and competent technical staff with a proven track record; the company’s efforts to expand its service areas to ensure continued growth; sustained profit performance; more than adequate liquidity position, financial flexibility and capitalization which can support additional debt.

Manila Water is the exclusive concessionaire for the East Zone of Metro Manila, comprising 23 cities and municipalities. It continues to expand its market locally with projects in Laguna, Pampanga, Boracay and Cebu. It also has international ventures in Vietnam.

“Throughout its operating history, the company has been able to meet and even surpass its regulatory and financial targets, making efficient use of its capital, accumulated industry experience and partnerships. The company’s management has also been very proactive in dealing with issues relating to the water industry, such as the development of new water sources,” PhilRatings said.

Manila Water chalked a net income of P4.27 billion in 2011, up seven percent from a year earlier. It sustained upward traction in the first quarter this year with net earnings rising 64 percent to P1.34 bilion.

As of end-2011, the company had comfortable levels of cash and short-term investments amounting to P5.89 billion. The amount further increased to P6.45 billion at the end of the first quarter 2012.

PhilRatings said the projected growth in Manila Water’s retained earnings is expected to support additional debt.

The company is currently undergoing its third rate rebasing period as the concessionaire of the East Zone. Rate rebasing occurs every five years after 1997, when the company was awarded the concession.

Manila Water has already submitted the requirements for the process to the regulators and is expecting feedback within the year.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=820593

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Sunday, June 24, 2012

Stock News 2012: PDIC pushes passage of bank liquidation law

Seal of Bangko Sentral ng Pilipinas (1993-2010)Seal of Bangko Sentral ng Pilipinas (1993-2010) (Photo credit: Wikipedia)
State-run Philippine Deposit Insurance Corp. (PDIC) is pushing for the enactment of a law that would govern the takeover, liquidation and winding up operations of banks that are closed by the Bangko Sentral ng Pilipinas (BSP).

PDIC president Valentin Araneta said in an interview with reporters that the proposed Closed Bank Liquidation Act (CBLA) would serve as a comprehensive law to hasten the liquidation of closed banks through the seamless transition from bank closure to liquidation.

“Our legislative agenda includes the proposed CBLA which will greatly smoothen the transition from a live bank in distress to a closed bank and minimize the disruption to the system,” Araneta stressed.

He pointed out that the proposed law that would govern the liquidation of closed banks has been presented to the Senate and House of Representatives.

The agency’s Legal Affairs Sector vigorously pursued legal action to recover and collect the receivables of closed banks and at the same time vigorously prosecuted legally liable erring closed bank officers and principals.

The PDIC official said Sen. Edgardo Angara and Albay Rep. Al Francis Bichara are looking at sponsoring the proposed billion.

Last year alone, 29 banks were closed by the BSP with a total of P26.4 billion of deposits outstanding accounted for by over 290,000 bank accounts of which nearly P13 billion were insured.

He said the total deposits of the closed banks were equal to 1.6 percent of the total national budget for 2011.

“Our concern here is not only for the insured deposits but for all the deposits because of the disruption that the closures inflict on our banking system and the destruction it causes on the value and the savings of depositors, as well as the costs to the insurance fund,” he lamented.

In 2008, the Legacy Group was ordered closed by the BSP, affecting P14 billion worth of deposits of which over P11.7 billion has been settled by PDIC.

Araneta said other legislative issues being pursued by PDIC include the institutionalization of the required Deposit Insurance Fund (DIF) and for more flexibility for the board to determine the DIF requirements.

The DIF serves as the funds backing up the insured deposits of the banking system. It is invested in Philippine government securities and government guaranteed instruments prescribed in the PDIC charter.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=820265

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Stock News 2012: BPI extends 'green loan' for waste-to-energy plant

English: BPI Building in Makati City, at the c...English: BPI Building in Makati City, at the corner of Ayala Avenue and Paseo de Roxas. (Photo credit: Wikipedia)
The Bank of the Philippine Islands (BPI) has extended a “green loan” for the construction of the first refuse-derived fuel (RDF) plant in the Philippines.

The funding is part of the bank’s Sustainable Energy Finance (SEF) program.

Green Alternative Technology Specialist Inc. (GATSI) will use the loan to finance the RDF project that will operate a waste management, reduction and utilization plant at the Rodriguez sanitary landfill in Montalban, Rizal.

RDF is a substitute to coal and fossil fuel created by converting solid waste to energy. Combustible components of municipal wastes such as plastic and biodegradable materials will be shredded and dehydrated via a waste converter technology to produce energy.

GATSI is a joint venture company producing and supplying RDF to Solid Cement Corp. for 10 years. Solid Cement will be able to save 50 percent of its coal requirements from using RDF.

GATSI and Solid Cement’s collaboration earned them the Fr. Neri Satur Award for Environmental Heroism by the Department of Environment and Natural Resources together with the Climate Change Commission, National Disaster Risk Reduction Management Council, Philippine International Theatre Institute and the UNESCO.

The SEF program is a partnership between the bank and the International Finance Corp. (IFC), the private investment arm of the World Bank Group.

Through this program, BPI makes it easy for companies and institutions to invest in energy efficiency and renewable energy projects.

In 2008, BPI and IFC launched the SEF, the first-of-its-kind program aimed to help businesses be cost-efficient and self-sustaining facilities and, at the same time, taking care of the environment.

It is designed for end-users, as well as service and technology providers of energy efficient (EE) and renewable energy (RE) products. The latter includes energy service companies (ESCOs), or any company or individual planning to design, develop or implement relevant projects.

The SEF program was jumped started by a P5-billion fund established by BPI, and the IFC guaranteed a certain amount or percentage of ‘green’ loans.

IFC has chosen the Philippines to jumpstart its first sustainable energy finance efforts in Southeast Asia. These pioneering efforts serve as a launch pad for any probable project where energy is produced, transmitted, delivered, consumed, or stored.

Since then, BDO Unibank Inc. established its own program with the IFC.

According to the multilateral development institutions, the Asia and the Pacific has been the world’s largest resource user since the mid-1990s. If current trends continue, its CO2 emissions are likely to more than triple by 2050, putting an unbearable strain on the earth’s ecosystems. Reversing this trend will require a new development model characterized by systems innovation, efficient use of resources, and a greatly reduced reliance on hydrocarbons.

http://www.philstar.com/Article.aspx?articleId=820272&publicationSubCategoryId=66

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Friday, June 22, 2012

Stock News 2012: Meralco subsidiary to undertake P22-M monorail project

The Right TrainThe Right Train (Photo credit: mutantMandias)
A subsidiary of the Manila Electric Co. will undertake the P22-million monorail project within the University of the Philippines campus in Diliman, Quezon City, the Department of Science and Technology (DOST) revealed yesterday.

Miescor Builders Inc., Meralco’s engineering, construction and industrial services subsidiary, will construct the 465-meter test track of the all-Filipino mass transport – the Automated Guideway Transit System or AGTS.

The AGTS will run on a track that curves from C.P. Garcia Avenue to the College of Arts and Letters building on Roxas Avenue of the Academic Oval.

“The AGTS is one of DOST’s high-impact technology solutions and is the first among the agency’s several proposed public transportation systems for Metro Manila,” Science Secretary Mario Montejo said.

The elevated guideway will be 6.1 meters high supported by high-quality concrete material, while the train’s body will be composed of two adjoining coaches, each capable of carrying 30 people.

The coaches will roll on rubber tires instead of metal wheels to minimize track noise.

The project team is composed of engineers from the DOST, UP Diliman, and the Project Management Engineering and Design Service Office. The team aims to create a fully automated, driverless electric transport that travels on an elevated track or guideway.

“If all goes as planned in the construction of the guideway, we will be able to initiate the testing in October,” Jonathan Puerto of the DOST’s Metals Industry Research and Development Center said.

Montejo said the system is environment friendly and non-polluting.

“It is also reliable because it is fully automated, and safe because the elevated guideway will not get derailed or cause road accidents. The AGTS also helps reduce traffic congestion and its economic costs,” he added.

http://www.philstar.com/Article.aspx?articleId=819704&publicationSubCategoryId=63

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Thursday, June 21, 2012

Stock News 2012: BDO, 5 other banks eye shuttered EIB

Original BSP Seal (1949-1993)Original BSP Seal (1949-1993) (Photo credit: Wikipedia)
State-run Philippine Deposit Insurance Corp. (PDIC) said yesterday that six banks, led by BDO Unibank Inc. of retail and shopping mall magnate Henry Sy, have expressed interest in acquiring the assets of shuttered Export & Industry Bank (EIB).

PDIC executive vice president Cristina Orbeta said in a press conference during the agency’s 49th anniversary celebration that interested strategic third party investors would be allowed to conduct due diligence on the assets of the closed bank starting July 2.

Orbeta pointed out that invitation for interested parties to commence due diligence would be released today and the bidding for the bank’s assets would either be on the last week of July or early August.

She revealed that the agency has engaged Alba Romeo & Co. – a unit of British-owned Binder Dijker Otte International – as financial auditor to determine the financial condition of EIB.

According to her, the financial auditor would take full accounting of the assets and liabilities of the bank and ascertain the reasonable valuation of the bank that was ordered closed by the Bangko Sentral ng Pilipinas (BSP).

Orbeta refused to divulge the identity of the interested investors saying the agency was bound by a confidentiality agreement.

She explained that a rehabilitation proposed for EIB should address the requirements for capital strengthening, liquidity, sustainability, viability, and governance.

The PDIC official said agency would no longer extend financial assistance to interested investors.

“The rehabilitation of EIB shall involve no additional cost to PDIC,” she clarified.

Orbeta said the agency would determine the rehabilitation proposal that is most advantageous to depositors, creditors, and taxpayers.

PDIC took over EIB last April 27 as receiver. The bank has a nationwide network of 50 branches and 47 automated teller machines (ATMs).

Orbeta said the insured deposits of EIB amounted to P3.4 billion while uninsured deposits reached P10.4 billion. Of the total insured deposits, PDIC has so far paid P34.17 million involving 22,636 accounts.

The maximum deposit insurance coverage was doubled to P500,000 per depositor in 2009 from P250,000 per depositor.

http://www.philstar.com/Article.aspx?articleId=819570&publicationSubCategoryId=66

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Stock News 2012: First Pacific plans to acquire 2-3 mines

Photo of MannyPhoto of Manny (Photo credit: Wikipedia)
Hong Kong-based First Pacific Co. Ltd. is ratcheting up its presence in the mining industry with plans to acquire two or three mining companies in the Philippines and Indonesia to support its goal to become a mid-sized global gold producer over the medium term.

During the Earth’s Resources Conference sponsored by Standard Chartered Bank in Hong Kong yesterday, First Pacific chief executive Manuel V. Pangilinan said the group is eyeing to produce one million ounces of gold a year in and outside the Philippines as it sees more upside potential for the precious metal.

Industry observers said gold remains a coveted asset given its long-term supply and demand dynamics. Continuing concerns about Europe’s financial problems and China’s reduced economic growth forecast made gold an attractive currency hedge.

“There’s a lot of promise out there but in many cases we have been unable to agree on price. Our preference is to invest in a mine that is already operating and already able to deliver to our bottomline,” Pangilinan said.

“You wont find us investing outside emerging Asia. We have a relative advantage in this part of the world so no matter how enticing a project in say, Australia, might look, we won’t go there,” he pointed out.

Pangilinan said the local mining firm they are targeting is already operating while its prospect in Indonesia   has yet to commence operations. “The one in Indonesia will be bigger than the other one we’re looking at in the Philippines,” he said.

“Ideally, we will invest in a mine which produces two metals so that one metal subsidizes the production cost of the other. Our ambition over the medium-term is a four fold increase in ore production,” Pangilinan added.

He said First Pacific, through Philex Mining Corp., already operates the Padcal mine in Benguet, which currently produces 25,000 metric tons of ore a day. Down south in Mindanao, Philex has the Silangan mine which is expected to come online by 2016 with a capacity of 35,000 tons a day.

Since Pangilinan took the helm at Philex, the group has made several investments in the mining space which include a five-percent stake in Lepanto Consolidated Mining Co. and a joint venture agreement to develop and operate a mining property owned by Manila Mining Corp. Both Lepanto and Manila Mining are controlled by businessman Felipe Yap.

As far as the Recto Bank is concerned, Pangilinan reiterated his earlier position of taking in a foreign partner, preferable a Chinese company.

“You really need someone with experienced technology. The most logical thing is to to partner with a Chinese company like Chinese offshore oil producer CNOOC, PetroChina and Sinochem,” he said.

Pangilinan said he is open to taking in one or two large partners if the size of the field is large enough. “We want to enlarge the consortium beyond ourselves. The advantage of taking in partners is that it internationalizes and depoliticizes the project. It’s best if there is one or two more non-Chinese and non-Filipino partners in the equation,” he said.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=819569

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Tuesday, June 19, 2012

Stock News 2012: After 3 failed bids, gov't to try and sell FTI anew

Official seal of City of TaguigOfficial seal of City of Taguig (Photo credit: Wikipedia)
After three years of delay and three failed biddings, the government will attempt to sell again the sprawling Food Terminal Inc. (FTI) property in Taguig City, the Privatization Management Office (PMO) said yesterday.

PMO Chief Karen Singson said the government intends to publish the invitation to bid by next week as she urged interested parties to place their bets.

“Everyone is invited to bid for the parcel. This is a straightforward property sale. Other parameters such as the minimum target selling price and prequalification requirements will be detailed at the bidding notice to be published on national newspapers,” she said.

The 103-hectare FTI agro-industrial complex is one the largest industrial complexes in Metro Manila and is currently home to more than 300 companies.

It provides industrial and commercial lots for medium-to-long term leases, and industrial buildings with standard-sized stalls for office, warehouse or small-scale processing operations.

Of the 103-hectare property, the government will bid out 74 hectares, Singson said.

The government will retain the rest of the property for various purposes.

“The government will study its options for the unprivatized special economic zone area located within the FTI complex, including the utilization of the same by the Department of Agriculture for food-sufficiency projects,” Singson said.

According to the PMO, part of the proceeds will go the Department of Agrarian Reform for the Comprehensive Agrarian Reform Program and to the Department of Agriculture.

With the sale, the government expects economic activities in Taguig City and nearby areas to flourish as employment increases and transport linkages in the complex improves.

The Aquino administration hopes to sell the property at a price higher than the P7 to P9-billion tab set by the previous government for the agro-industrial estate.

Robinson’s Land has expressed interest in the property and so has the Ayala Group and Henry Sy’s SM Development Corp.

http://www.philstar.com/Article.aspx?articleId=818600&publicationSubCategoryId=

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Stock News 2012: Gov't to sell P80-B SMC preferred shares

The government will eventually sell its preferred shares in diversifying conglomerate San Miguel Corp., saying that businesses are better off in the hands of the private sector, the Department of Finance (DOF) said yesterday.

If SMC exercises its right to redeem this year the non-voting preferred shares held by the government, the state has no choice but to give this up, Finance Officer-in-Charge and Undersecretary for Privatization John Philip Sevilla said.

Whichever comes first, Sevilla said the end result is an eventual sale of the government’s stake because the government has been trying to leave to the private sector those businesses outside its expertise.

The government’s preferred shares in San Miguel, estimated at roughly P80 billion belong to coconut farmers as ruled by the Supreme Court.

 “We are not in a hurry to sell the preferred shares but eventually we will because the government wants to get out of private businesses,” Sevilla said.

The government holds 753.8 million preferred shares in the diversifying conglomerate. This was equivalent to 24 percent common shares that were converted into non-voting preferred shares in 2009.

SMC has the option to redeem the shares this year, which Sevilla said is a possibility.

“If they redeem it, we have no choice but to just get the cash,” he said.

Proceeds of the redemption or an eventual sale would be used to help coconut farmers, Sevilla said.

In a disclosure to the Philippine Stock Exchange (PSE) early this month, SMC said it was looking to refinance the preferred shares it issued in 2009.

SMC is reportedly looking to raise P80 billion in a preferred shares offering in September, proceeds of which will be used to redeem the shares held by the government.

http://www.philstar.com/Article.aspx?articleId=818599&publicationSubCategoryId=66

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