Local group to invest P8 billion in IP Converge

MANILA, Philippines - The 8890 Group of Companies, one of the leading low-cost housing developers in Visayas and Mindanao, is infusing up to P8 billion worth of assets into IP Converge Data Center Inc. in line with its plan to transform the listed technology firm into a holding company.

The 8890 Group, owned by a triumvirate of Jesus B. Atencio, Luis Yu Jr. and Mariano Martinez, acquired last June around 80 percent of IP Converge, comprising 176.4 million shares, at P0.9524 each share or a total of P168 million.

In a briefing yesterday, Atencio, president of 8890 Housing Development Corp., said the group is preparing to offer as much as P8 billion worth of shares through a follow-on offering slated in June or July next year to fund its aggressive expansion aimed at further strengthening its foothold in the mass housing segment. The group has tapped Maybank ATR-Kim Eng Capital Partners Inc. as its financial advisor.

Atencio said the move is also aimed at further boosting its cash flow to ride on the booming local economy and a resurgent property sector.  The group is eyeing P6 billion in sales next year from a projected P5 billion sales this year.

“We’re exploring all options to raise equity and boost production, given the overwhelming demand in mass housing,” Atencio said, noting that the country’s housing backlog is estimated at about 3.8 million and is expected to rise to 4.65 million by 2016.

Boasting a solid track record spanning over 22 years, 8890 HDC has completed 51 residential subdivisions and has successfully turned over more than 41,000 housing units located in Cebu, Davao, Angeles, Lipa, Cavite and Naga.

It is currently building 22,446 housing units with an estimated aggregate value of P15.6 billion.  Aside from this, the company has converted its existing P5-billion landbank into nine new subdivisions and medium-rise condominium projects which would translate to an additional 15,912 units worth around P14.6 billion.

In addition, the company acquired 12 new properties which will be developed into high-rise condominiums, time share properties, and condotel projects in key cities across the country.  These future developments will give rise to a total of 34,576 units, with an estimated sales value of P19.3 billion.

The 8890 Group is also engaged in sports or tourism-related development.  It currently operates two watersports facilities for residents of its housing projects in Angeles and Davao.

The group also offers   time share vacation deals at its 3,000-unit Azalea Residences in Baguio for an investment of between P250,000 to P500,000 each share. A time share gives each owner the right to occupy a unit of real estate property such as a condominium or vacation home during a specified number of days. 

More vacation houses are expected to rise in Boracay, Cebu, Davao, Angeles and Manila, Atencio said.

The 8890 Group has been posting an average growth of 14 percent in gross revenues and 104 percent in net worth. 

The 8890 Group is eyeing a net income after tax of at least P500 million this year.  Its asset base is likewise forecast to exceed P7.3 billion this year.