MANILA, Philippines - Suntrust Home Developers Inc., the low-cost housing unit of property giant Megaworld Corp., is undertaking a rights offer to raise P20 billion in additional capital to fund the acquisition of more properties for its real estate business expansion.
Suntrust president Ferdinand B. Masi said during the company’s stockholders meeting yesterday that they plan to increase their authorized capital stock by P20 billion from its existing P3 billion.
“To support the capital increase, the company will conduct a rights offer to holders of common shares at the proportion of two and one-half new common shares for every existing common share. These rights shares will be issued from the capital increase,” Masi said.
Other details of the rights offer were not disclosed by the official.
Masi said proceeds of the rights offer, however, would be used primarily to finance acquisition of properties.
He said Suntrust is currently considering several properties for acquisition as it plans to further engage in real estate development.
Aside from its existing real estate business, the company is also engaged in property management of residential and office buildings and private estates in Metro Manila and Cebu through First Oceanic Property Management Inc., as well as transport and shuttle rental services through CityLink Coach Services Inc.
“Our investment in First Oceanic Property Management created a new revenue stream in the form of management fees to complement existing rental income generated from investment in real estate,” Masi said.
Masi said First Oceanic continued its strong contribution to the company’s revenues during the first nine months of the year, as it grew to P225.08 million from P196.84 million last year.
‘The net profit as of the third quarter of 2014 already stands at P11.65 million and we hope to surpass our previous year’s net profit,” he said.
Based on a report as of end-September last year, Megaworld of property tycoon Andrew Tan is the major stockholder in Suntrust Home with a 42.48 percent ownership interest.
Megaworld last year secured full ownership in affordable housing developer Suntrust Properties Inc. after it bought 78.74 million shares from Suntrust Home Developers.
Suntrust Properties will be making its initial entry into industrial park development with a 200-hectare project in Tanza, Cavite to be called Suntrust Ecotown.
Megaworld is investing P5 billion over the next eight years for the development of the industrial park project.