Malaysian firm buys 8% of 8990 Holdings

MANILA, Philippines - Malaysia’s strategic investment fund has acquired a minority stake in locally-listed mass housing developer 8990 Holdings Inc. for almost P3 billion.

The deal allowed Khazanah Nasional Berhad to become a cornerstone investor ahead of the planned P15-billion public share sale of 8990 Holdings.

In its website, Khazanah said its special purpose vehicle Pasir Salak Investments Ltd. entered into a cornerstone investment agreement deal for the upcoming share offering of 8990 Holdings.

“Khazanah will invest P2.925 billion to acquire a stake or approximately eight percent in 8990 Holdings,” the state-owned company said.

The transaction, which marked the Malaysian firm’s first foray into the Philippines, “will allow Khazanah to gain exposure to the country’s unique growth story,” it added.

8990 Holdings is one of the top developers of mass market housing, having sold more than 26,000 units from completed and on-going projects. It operates through the Deca Homes brand for horizontal projects and Urban Homes brand for vertical projects.

Given its established track record, 8990 Holdings is positioned to address the shortage of affordable housing in the Philippines through fast turnaround construction methods, affordable financing programs and comprehensive subdivision management, Khazanah said.

Since starting its mass housing business in 2003, 8990 Holdings has completed 11 projects in Luzon (Angeles, and Cavite Cities), Visayas (Cebu Province and Iloilo), and Mindanao (Tagum and Davao Cities). So far, 8990 Holdings is developing 15 projects in Cebu, Davao, Iloilo, Clark, Pampanga and other major hubs in the Philippines.

“It also provides a potential avenue to foster know-how sharing that could benefit affordable housing development in Malaysia and more broadly in the region,” it added.

To date, Khazanah is involved in various sectors such as power, telecommunications, banking, healthcare, airport management, infrastructure, leisure and tourism, property development, broadcasting, investment holding, and technology.

Khazanah’s investment portfolio includes Telekom Malaysia Bhd., Tenaga Nasional Bhd., CIMB Group, Axiata Group Bhd., IHH Healthcare Bhd., Malaysia Airports Holdings Bhd., and UEM Sunrise Bhd.

For its part, 8990 Holdings plans to sell as much as 1.24 billion shares at at a maximum offer price of P12.70 apiece, for a total transaction value of P15.74 billion.

The listed property firm hired UBS AG (Hongkong branch) as the sole global coordinator, sole international bookrunner and lead manager, while UBS Investments Philippines Inc. and SB Capital are the domestic lead underwriters.

In January to September, earnings of 8990 Holdings hit P2.1 billion, up 64 percent from P1.28 billion a year ago. For the third quarter alone, the property developer’s income almost doubled to P589 million from P300.4 million a year ago, while sales rose 27.6 percent to P1.23 billion from P964.35 million.

Apart from housing, 8990 Holdings is also in the business of resort and hotel development under the time share membership brand Azalea. It is also involved in the Deca Wake Board Park in Angeles and Davao.