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Thursday, July 12, 2012

Stock News 2012: PLDT unit sells 27% stake in Philweb

The PLDT LogoThe PLDT Logo (Photo credit: Wikipedia)ePLDT Inc., a wholly-owned subsidiary of dominant carrier Philippine Long Distance Telephone Co., is selling its 27 percent stake in Philweb Corp. of businessman Roberto Ongpin for a total consideration of about P4.257 billion.

In a joint statement submitted to the Philippine Stock Exchange (PSE), ePLDT and Philweb said they inked the share purchase agreement yesterday.

The transaction covers 397.892 million shares or about 27 percent of the total outstanding capital of Philweb. It would be undertaken in four tranches to be completed by the end of 2013. The first transaction is expected to be consummated on Friday at P10.7 per share. The second tranche would also be priced at P10.7 per Philweb share while the third and fourth transactions would be priced at the same base price of P10.7 but with an adjustment of three percent interest per annum.

Philweb corporate information officer Cliburn Anthony Orbe told the stock exchange that the company has enough cash to acquire the shares, resulting in higher earnings per share.

“Philweb, on the other hand, was happy to acquire the ePLDT stake because its cash flow was sufficient to pay for its acquired shares and would therefore result in higher earnings per share for the company by reducing the outstanding share by approximately 27 percent,” Orbe stressed.

ePLDT invested over P500 million to acquire a 20 percent stake in Philweb in May 2006.

ePLDT corporate secretary Ma. Lourdes Rausa-Chan told the PSE that the company wanted to cash in on its investments and thus decided to unload its stake in Philweb.

“Having made over 660 percent return on its original investment in six years, ePLDT wanted to realize its profits,” Chan said.

Both companies, however, pledged to continue working with each other on various mutually beneficial projects.

Philweb is primarily engaged in Internet-based gaming, through its appointment as principal technology service provider under the marketing consultancy agreement for Internet sports betting and Internet casino with the state-run Philippine Amusement and Gaming Corp. (Pagcor).

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Wednesday, July 11, 2012

Stock News 2012: AMA Group makes big push into real estate with P60-B investment

Map of Metro Manila showing the location of Ma...Map of Metro Manila showing the location of Makati City (Photo credit: Wikipedia)
Amb. Amable R. Aguiluz, acknowledged as the pioneer of IT education in the country, is making a big push into real estate with a planned investment of P60 billion in residential condominiums, five-star hotels, offices, retail establishments and master-planned communities over a 10-year period.

Picar Development Inc., which forms part of Aguiluz’s AMA Group of Companies, is embarking on 10 to 15 projects across the country in line with its goal to become a major player in the booming property sector.

In a press briefing yesterday, Picar general manager Danilo B. Jugno said the company is aggressively building up its investment portfolio, which is expected to translate to 630,000 square meters of prime residential and commercial lots in Makati, Alabang and Gen. Trias, Cavite, among others.

Jugno said around P11 billion of the P60 billion capex will go to the group’s flagship development, Picar Place, a mixed-use complex along Kalayaan Ave. in Makati City.

Nestled on a 1.5-hectare lot, Picar Place will give rise to the tallest skyscraper in Makati dubbed Stratford Residences and the first five-star, Swiss-run International hotel in Metro Manila (Movenpick). Both projects are slated for completion in 2016.

The 74-story Stratford Residences will comprise three towers housing a total of 1,124 units priced at P3.2 million to P20 million each.

The Movenpick Hotel, on the other hand, will feature 324 hotel rooms and 280 residential apartments all generously sized with European designs.

The company has already completed the construction of Buddha Bar within Picar Place at a cost of P500 million. It is the first Buddha Bar in Asia and the 27th of the world’s high-end bar and fine dining restaurant chain.

In Alabang, Picar is developing Chelsea, a 32-story mid-range residential and commercial condominium. Estimated to cost around P1.7 billion, the project will offer 696 units.

Also in the pipeline are a traveller’s hotel in a 3.5-hectare property in Caticlan and an IT building in Cebu.

Future projects also being planned in Calamba, Quezon City and Davao.

The group has already established a solid footprint in the southern part of the metro with Ara Vista Village, a 50-hectare residential/commercial development in Gen. Trias, Cavite. When completed, the project will be the country’s first WiFi-enabled township.


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Monday, July 9, 2012

Stock News 2012: Leisure & Resorts World to invest P3 B in Sy-led casino venture

Las Vegas StripLas Vegas Strip (Photo credit: Wikipedia)
Leisure & Resorts World Corp. (LRWC) will invest as much as P3 billion in a $1 billion casino venture with Sy-led upscale leisure developer Belle Corp. and Macau casino firm Melco Crown Entertainment.

LRWC turned over to Melco the task of managing and operating the integrated casino and hotel complex Belle is building within the 100-hectare Entertainment City along Manila Bay, in exchange for a share in the project’s earnings.

LRWC was originally supposed to manage the casino and split EBITDA (earnings before interest, taxes, depreciation and amortization) evenly with Belle for a 10-year time frame. Belle and LRWC, however, decided to amend their earlier arrangement to make way for the entry of Melco.

Sources said LRWC is likely to get a maximum 30 percent share of the lease rental payments to be made by Melco to Belle for the casino property.

Aside from that, LRWC is expected to get up to 15 percent of the casino’s revenues.

Sources said LRWC would invest up to P3 billion in the entertainment complex, which will come from a combination of cash and debt.

LRWC was tapped by Belle in 2011 to handle the gaming component of the integrated resort given the latter’s lack of gambling experience. Formerly Atlas Fertilizer Corp., LRWC operates professional bingo and interactives games licensing at the Cagayan Economic Zone Authority.

The Sy family’s flagship company SM Investments Corp. is involved in five core businesses – retail merchandising, mall operations, property, banking and hotel and leisure.

Belle was initially looking at teaming up with US-based Harrah’s Entertainment Inc., which owns over 50 casinos under the Bally’s, Caesars, Horseshoe and Rio brand names but talks bogged down. Belle eventually picked LRWC as its partner for the project.

The huge financing requirement and the Philippine Amusement & Gaming Corp.’s requirement for a minimum 800-room hotel to be in place before casinos could operate within the Entertainment City, hindered the development of the project, prompting Belle and LR to find a foreign strategic partner.

Belle may have found the perfect fit in Melco, which has placed a large bet on expanding to one of the world’s emerging casino markets. Melco expects to invest up to $580 million over the course of project.

The project, located in an area that is envisioned to become the Philippines’ version of the Las Vegas strip, would be Melco’s first outside Macau, where it operates the City of Dreams and Altira Macau casinos. The company is developing its third casino, Studio City, which is slated for opening in 2015.

Melco said it was entering the Philippine gaming market because the country is a popular tourist destination and close to major sources of tourists including South Korea, Taiwan, Japan and China.

Melco said it wanted to “take advantage of the anticipated growth in the leisure and tourism industries in the Philippines, which will cater to an increasingly affluent and growing Asian middle class who continue to seek new travel destinations and experiences.”

Gambling revenues in Philippines are forecast to grow from $1.3 billion in 2011 to $3 billion in 2015 once four new resorts are completed.

Three other groups with casino licenses in the Entertainment city include port tycoon Enrique Razon’s Bloomberry Resorts Corp., Travellers Group (a joint venture between Malaysian casino company Genting Hong Kong Ltd. and property tycoon Andrew Tan’s Alliance Global Group Inc.), and Universal Entertainment Corp. of controversial pachinko billionaire Kazuo Okada.


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Sunday, July 8, 2012

Stock News 2012: Napocor, PSALM get ratings upgrade

Standard & Poor’s (S&P) has upgraded the credit rating of two state-run power firms to just a notch below investment grade.

The higher ratings for the National Power Corp. (Napocor) and the Power Sector Assets and Liabilities Management Corp. (PSALM) followed after an upgrade in the Philippines’ sovereign credit score.

“These rating actions come after we raised the foreign currency sovereign credit rating on the Republic of Philippines,” S&P said in a statement.

Specifically, ratings for foreign currency, local currency and senior unsecured debts of Napocor and PSALM were raised to BB+ from BB. The credit outlooks were changed to stable from positive.

“We consider the credit profiles of PSALM and Napocor to be weak and heavily dependent on the support of the Philippine government,” said S&P credit analyst Rajiv Vishwanathan.

However, Vishwanathan said “both utilities are almost certain to receive timely and sufficient extraordinary support from the Philippine government in the event of financial distress.”

To date, Napocor has transferred to PSALM more than 99 percent of its rated US dollar bonds, including the $300 million due in 2028 and $160 million due in 2016.

Outstanding rated bonds of Napocor amount to $452,000 due in 2028 and $133,000 that will mature in 2016 as most debts were shouldered by PSALM.

S&P said PSALM and Napocor play a critical role in implementing government reforms in the power sector and providing electricity to far-flung areas.

The firms also stand to benefit from government control over key budgetary and strategic decisions, S&P added.

“The Philippine government also provides an irrevocable, unconditional and timely guarantee on all debt obligations of PSALM and Napocor,” S&P said.

PSALM is the state agency created by the Electric Power Industry Reform Act of 2001 to privatize government power assets as well as manage power plants and debts of Napocor. It buys the fuel requirements of state-owned power plants.


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Stock News 2012: Local Coca-Cola unit optimistic on growth

Coca-ColaCoca-Cola (Photo credit: Wikipedia)
Coca-Cola Bottlers Philippines Inc. (CCBP) is on track to growing faster than the pace of the economy, an executive said.

Growth will be driven by higher consumer spending on the back of government-initiated activities and the approaching election season.

“We are happy to say that our Coca-Cola business is growing well and growing in all sectors of the country, which is exciting for us,” CCBP president and chief executive William Schulz said in a chance interview.

“It has been a good year so far but halfway still to go...we are on track to delivering our internal targets,” Schulz added.

Late in May, Guillermo Aponte, president and general manager of CCBP’s parent firm Coca-Cola Export Corp. (CCEC) said the company expects to “grow faster than the economy” this year.

The government targets a five to six percent growth in gross domestic product (GDP) this year, faster than the 3.7 percent uptick last year.

The country’s GDP climbed 6.4 percent in the first quarter, the fastest in the 10-member countries of the Association of South East Asian Nations and second only to China in the Asian region.

“We are certainly delighted that the government is investing in the economy because economic growth helps consumers to buy more products,” Schulz said.

The government has fast-tracked its spending to stimulate the economy despite the debt crisis in the Eurozone and timid growth in the US.

Furthermore, election spending will bring more growth to CCBP even in the second half this year. The mid-term senatorial election is scheduled in May next year.

“In the Philippines, during the election season there is economic activity,” Schulz said.

“We expect the equity of our brands to drive our business but it is always good for us when the economy is strong,” Schulz said.

The Philippines is now the company’s 10th largest market in the world in terms of sales volume.

Schulz said Coca-Cola is the top softdrinks brand in the Philippines, leading the nearest competitor by 15 to 1.

Last year, CCEC opened a manufacturing plant in Cagayan de Oro to cater to consumers in the region. It also expanded the capacity of its plants in Sta. Rosa Laguna and Cebu.

To date, the company currently has around 22 bottling lines nationwide, with its newest in Cebu that was opened early this year.

CCEC fully owns CCBP after it bought back the 60 percent share held by San Miguel Corp. four years ago.

The company manufactures carbonated beverages Coke, Sprite, Royal, as well as other non-carbonated beverages.


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Friday, July 6, 2012

Stock News 2012: Sy group, Macau casino operator forge $1-B gaming complex deal

MACAU, CHINA - FEBRUARY 01:  Singer Coco Lee p...MACAU, CHINA - FEBRUARY 01: Singer Coco Lee poses for the media wearing a copy of the iconic white rhinestone glove worn by Michael Jackson during the opening ceremony of the MJ Gallery at Ponte 16 Resort-Macau on February 1, 2010 in Macau, China. Michael Jackson famously wore his white rhinestone glove at the 1983 Motown 25 Television Special, where he premiered the moonwalk to the world. (Image credit: Getty Images via @daylife)Belle Corp., controlled by the family of retail tycoon Henry Sy, has struck a partnership with Melco Crown Entertainment Ltd., paving the way for the entry of the Macau casino operator into the rapidly gaming market in the Philippines.

Belle vice-chairman Willy N. Ocier said an agreement has been signed yesterday between the company and Melco on their collaboration involving a $1-billion casino-hotel project along Roxas Blvd.

“We’re announcing tonight. Done already,” Ocier said as of presstime yesterday.

Ocier said the terms of the deal would be crafted in the next 60 days.

He pointed out that their original partner, Leisure & Resorts World Corp., is still very much part of the project amid speculations it would be bought out by Melco Crowne, which is backed by the sons of Macau gambling kingpin Stanley Ho and the late Australian casino-and-media magnate Kerry Packer.

Melco is one of only six casino license holders in Macau, the world’s largest gambling market. It runs two casino-resort properties in the Chinese territory and has a 60 percent stake in a project that is undergoing construction.

The Belle-Melco partnership is seen as a big boost to the Philippines’ goal of becoming a major gaming haven in Asia.

It will also provide Melco a foothold in the Philippine gaming market, which it has long cast its eyes on.

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

The project, 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.

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Stock News 2012: ALI to spend P65 B on new QC hub

Skyline of Quezon CitySkyline of Quezon City (Photo credit: Wikipedia)
Taking an even more aggressive posture, property giant Ayala Land Inc. (ALI) is coughing up P65 billion over a 10-year period to develop Vertis North, a new urban, transit-oriented, mixed-use community within the North Triangle property in Quezon City, which is envisioned to be the country’s next premier central business district.

In a briefing yesterday, ALI president Antonino Aquino said the 29-hectare Vertis North will be the group’s biggest and most modern development in Quezon City seen to attract top locators in the area.

Vertis North, a joint venture between ALI and the state-run National Housing Authority, will have 45 towers, comprising a broad range of offices, residential and retail spaces and a hotel when completed.

Aquino said the group’s track record and strong branding will ensure that the development will achieve its highest potential value.

Encompassing 220,000 square meters of space, the first phase of Vertis North will require an investment of P12 billion over a three-year timeframe to construct office buldings catering to business process outsourcing (BPO) companies, a Kukun hotel, and a retail strip patterned after Bonifacio High Street within a seven-hectare lot.

“The aim is to create a new and dynamic urban area with a high quality of life. This is envisioned to be the gateway to the North given its connection to the commuter rail lines and major road arteries. We feel QC, being the largest city in area and population, deserves to have its own CBD,” Aquino said.

“Vertis North will be no different from what ALI has developed in the past. It would be like Makati - a large-scale mixed use development that is now the country’s central business district,” he added.

Vertis North is the culmination of a public bidding process initiated by the government on Oct. 3, 2008. The joint venture aims to benefit NHA in achieving its mandate of providing housing for informal settlers and transforming a non-performing asset into a model for urban renewal.

NHA, which contributed the land, expects to gain around P11 to P12 billion worth of housing investments through its partnership with ALI, partly helping them curb the huge housing backlog.

NHA general manager Chito Cruz said that of the 10,000 families squatting in the area, the number has been reduced to around 3,500. He is hopeful he can relocate the remaining informal settlers by September this year.

Aquino said ALI, which pioneered the establishment of integrated business hubs like the Makati central business district and Bonifacio Global City, wants to put up an intermodal transport terminal facility at Vertis North to further stimulate growth in the area.


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