MPC still in talks with groups for real estate development projects

Property conglomerate Metro Pacific Corp. said yesterday it has been in talks with several groups for its real estate development projects although no agreement has yet been finalized over its crown jewel – the sale of its controlling stake in Bonifacio Land Corp.

MPC said that while it remains focused on its debt reduction and restructuring activities, it is also pursuing real estate development initiatives to grow its business in the Bonifacio Global City and other areas.

"Accordingly, MPC continues to engage in discussions, and share relevant information, with existing and potential creditors of the company as well as potential development partners (including the Unilab, Ayala, and other business groups)," the company said in a statement to the Philippine Stock Exchange.

BLC, the private consortium developing the Bonifacio Global City, is 73 percent owned by MPC, the Philippine unit of Hong Kong’s First Pacific Co. Ltd. (FPC). Together with the state agency Bases Conversion Development Authority, BLC formed the joint venture Fort Bonifacio Development Corp. for the transformation of the 150-hectare former military base into a modern, integrated office, commercial and residential complex.

There have been reports that the Ayala group and the Campos group of United laboratories have tied up for the possible acquisition or MPC’s interest in BLC, seeking to thwart a prior agreement between the Gokongwei group and MPC’s parent company FPCL.

However, Ayala Corp. denied the report, saying that it "has not entered into discussions with Metro Pacific Corp. or Unilab, much less conducted due diligence on Bonifacio Land Corp."

Last June, the Gokongwei group and First Pacific signed a binding memorandum of agreement to form a $925-million joint venture that will absorb First Pacific’s 24.47-percent stake in Philippine Long Distance Telephone Co. (PLDT) and its 50.4-percent secured interest in BLC.

The deal also stipulated that the joint venture will assume the repayment of MPC’s outstanding loan obligation of $105 million, granted by FPC subsidiary Larouge B.V. and secured by a pledge over shares equivalent to its stake in BLC.

MPC is in the middle of a group-wide debt reduction and management program aimed at wiping out its huge debt load. As of end-2001, MPC has P18.5 billion in consolidated interest bearing liabilities out of which P11 billion is attributed to MPC; P2.7 billion to BLC; P2.9 billion to FBDC; P1.1 billion to Negros Navigation Co.; and P765 million to Landco Pacific.

Last year, MPC said it was ready to divest its entire interest in BLC as part of the company’s debt reduction and restructuring efforts. Also part of the plan involves the disposal or sale of some of its non-core assets, specifically the non-property units such as Nenaco and First e-bank, to raise more cash for the debt reduction program. – Conrado M. Diaz Jr.