Robinsons Land acquires Manila Gas for P573M

The government has finally sold Paco, Manila property of Manila Gas Corp. (MG) for P573 million to Robinson’s Land Corp. (RLC), the property company owned by taipan John Gokongwei.

Finance officials announced that the transaction was finalized yesterday even as the government began evaluations of the standing offers for another prime government property in Makati estimated to be worth at least P1.8 billion.

Officials said the sale of the MG property should augur well with the 4.8-hectare Makati property that used to be occupied by the International School (IS).

After months of negotiation that followed the open bidding held in October last year, Finance Undersecretary Gabriel Singson Jr. told reporters that the agreement was reached with RLC which outbid its rival, Community Innovations of the Ayala Group of Companies.

Singson said RLC has already paid off the entire amount yesterday following the official signing of the sale agreement between the government, which owns Manila Gas, and RLC.

Singson said RLC made a higher bid of P618 million against Ayala’s bid of P86 million but both bids were lower than the indicative price of P637 million based on a 2005 appraisal.

After the failed bid, Singson said MG was instructed to renegotiate the original bid made by RLC and the final sale price was whittled down to P573 million.

Singson said part of the proceeds of the sale would go to MG and only around P437 million would go to the National Government (NG) including P137 million in taxes.

On the other hand, Singson said the government had begun reviewing two proposals for the outright sale of the IS property; one from the AMA Group of Companies owned by businessman Amable R. Aguiluz and the other from Century Properties owned by Ambassador Jose E.B. Antonio.

Singson said the two property developers also made bids when the IS property was auctioned last year but both bids were lower than the indicative price.

"Now we are evaluating both proposals to see which one would give us the best deal," Singson said. "We’re basically talking about the bottom line price ad we hope to complete this process soon."

Both the MG and IS properties have been repeatedly bid out by the government under different administrations but the depression in the property development market has forced all previous auctions to fail either due to lack of interest or due to low bids deemed unacceptable by privatization officials. Singson said the IS property was being sold as an institutional zoned area after the failure of earlier plans to get the property reclassified as a commercial zone.

Had the property been rezoned as a commercial zone, the price would have been higher although Singson said the indicative price more or less reflected the latest available market price for the area.

The sale of the MG and IS properties, Singson said, would make it more possible for the government to met its privatization target of P2 billion this year when combined with the sale of other real property assets in the 2006 portfolio.