Sobrepeña group cuts stake in FELI

MANILA, Philippines - The Robert John Sobrepeña-led group which controls Fil-Estate Land Inc. (FELI) will retain a fifth of the cash-strapped property firm following the entry of listed holding firm Alliance Global Group Inc. (AGI) of tycoon Andrew Tan.

In a disclosure to the Philippine Stock Exchange yesterday, FELI said the group’s stake would be reduced to 21.57 percent from the existing 53.77 percent with AGI’s subscription of P5 billion worth of FELI shares. Public float will similarly be affected as it would go down to 18.55 percent from 46.23 percent.

The subscription, however, is subject to the Securities and Exchange Commission’s approval of FELI’s increase in capitalization from P5 billion to P10 billion.

The shares to be subscribed by AGI represent a 59.88-percent stake in FELI.

The fresh capital infusion is expected to boost FELI’s bid to regain its old glory as a premier real estate developer in the country as it shall “afford the liquidity needed by FELI to develop and complete its existing projects, create new projects, redeem certain convertible bonds and prepay certain loans.”

“ With AGI’s financial strength backing up development of FELI’s flagship projects situated in the prime areas of Ortigas Center, Quezon City, Tagaytay, Nasugbu and Boracay, projected revenue streams for FELI are expected to spike with the forging of the strengths of both companies,” FELI said.

FELI said 75 percent of the subscription price, or P3.75 billion, shall be paid and deposited to the escrow account in the name of FELI within five days from SEC approval of the capital increase. The amount shall be released to FELI within five days upon approval of the listing of the subscribed shares.

The subscription price represents an 8.7 percent premium over the closing price of P0.92 per share of FELI as of Dec. 22.

On closing date, FELI shall convene a board meeting to cause the reorganization of the company including the election of at least four people from AGI as directors.

AGI’s purchase of a majority stake in FELI will allow the Tan-owned holding firm to develop more than 1,000 hectares of tourism-oriented communities in the country’s prime tourist spots outside of Metro Manila.

AGI, one of the country’s largest conglomerates, is an active player in a wide range of industries, from real estate development to food and beverage, quick service restaurants and hotels and resorts development. Among its units include Megaworld Corp., Emperador Distillers Inc. and McDonalds.