MPIC selling additional 15% stake in Landco Pacific

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) is selling an additional 15 percent of its interest in upscale property development company Landco Pacific Corp. for a still-to-be determined amount to AB Holdings Corp., reducing MPIC’s equity in Landco to just 19 percent.

The MPIC board approved Wednesday the execution of a term sheet agreement with AB Holdings and Landco relating to the acquisition by AB Holdings of additional Landco common shares from MPIC representing 15 percent of the total issued common shares of the property company.

MPIC likewise gave its go-signal to the restructuring of the loans and advances it previously granted to Landco.

AB Holdings earlier acquired an additional 17 percent stake in Landco from MPIC. With the disposition by MPIC of additional shares in Landco, AB Holdings will be owning more than 80 percent of Landco.

Landco president and CEO Alfred Xerez-Burgos III yesterday told The STAR that MPIC and Landco are still in the process of negotiating the terms of the sale of the additional 15-percent stake by MPIC to AB Holdings, a company controlled by the Xerez-Burgos family.

When asked how much of the purchase price will be paid for by AB Holdings in cash or in particular real estate assets of Landco, Xerez-Burgos said this is also still being discussed.

He also revealed he does know what MPIC’s plans are about its remaining 19-percent stake in Landco, although he said that if this will be sold in the future, AB Holdings can consider it.

Xerez-Burgos noted that while MPIC has been diversifying away from non-core businesses like real estate and into core activities like infrastructure, AB Holdings, on the other hand, wants to concentrate on real estate, by buying more of Landco to solidify their holdings.

MPIC earlier sold 17 percent of Landco AB Holdings in September last year although the deal was closed only this year.

“We expect the agreement on the 15 percent to be signed very soon,” he said.

Meanwhile, Xerez-Burgos revealed that Landco is spending about P1 billion this year for expansion phases or development of new products in existing projects.

“We are not undertaking new projects outside those that we already have this year. Instead, we are concentrating on the expansion of existing ones as well as developing new projects within those that we already have,” he said in an interview.

He said there is still a lot of room for development within their existing projects, considering that these are located in vast tracks of land.

Landco’s existing projects which will house new developments include those in Playa Calatagan, Playa Laiya in San Juan, Batangas and the Hacienda Escudero project.

Landco earlier reported a 400-percent increase in net income, from P42 million in 2008 to P166 million in 2009.

“We consciously set out to consolidate Landco’s operations last year after a period of high growth. Landco did not launch any new project. Instead, we focused our resources on substantially completing our existing projects and fulfilling our buyers’ expectations,” Xerez-Burgos explained.

He added that as part of the company’s thrust to simplify operations, certain non-core businesses were sold, among which were its shopping centers and memorial parks. The gain on the sale of its shares in NE Pacific Shopping Centers Corp. contributed to the increase in net income.

With Landco now majority owned by AB Holdings, he said they are confident that with a new political administration, real estate prospects will remain bright in 2010.

“Landco will continue to do what it does best – delivering projects with premium quality that our select clientele can be proud of,” he added.