STI reduces outlay for expansion

MANILA, Philippines - STI Education Systems Holdings Inc. of businessman Eusebio Tanco is reducing its capital expenditures this year.

STI Holdings president and chief executive officer Monico V. Jacob told The STAR that the listed education firm has allotted roughly P100 million for capital expenditures this year, a big drop from its P1.2 billion capital spending last year.

“We have completed our planned expansion, the last of which was our campus in Lucena. We have tapered off on our capex budget,” Jacob said.

Jacob said this year’s capital spending would mostly go to the renovation of the West Negros University in Bacolod, a school in which STI Holdings acquired 99 percent equity in late 2013.

“So this year, capex is very little, just additional renovation capex,” he said.

In a separate interview, Jaeger Tanco, son of STI chairman Eusebio Tanco, said the company is also not prioritizing acquisition and expansion at the moment.      

“Because of the K-12 program, we’re not really into building new schools anymore, even acquiring. What we’re doing is we’re waiting first because what happens is even after you build a school right now, by the time it gets finish, we hit K-12 and we don’t have any students. So we’ll not continue doing that at the moment. But we’re open if there is opportunity,” Tanco said.

Tanco, who is the currently president and chief executive officer of his family’s insurance company, said STI Holdings remains business as usual despite the company’s dispute with the Benitez clan, majority owner of the Philippine Women’s University (PWU).

When asked if the current issues with the Benitez family is taking its toll to the company, Tanco said: “It does not affect us, doesn’t make any difference.”

“No, it’s not a distraction. We’re doing really well. This year we’ve done really well, enrollment continues to go up. We’re very bullish that it will still continue growing so I don’t think is as much of a distraction,” he added.

Tanco’s camp and the Benitez family have been at war over the past few months as they continue to battle for ownership of PWU.

“I don’t think the problem is with us. I think what we offered was fair. We came up with it in a mathematical way. It was no just something that we just came up with. It is fair so it’s up to them to see if they can accept it or not,” Tanco said.

STI is moving to foreclose PWU properties due to the latter’s alleged failure to pay almost P1 billion in accumulated loans, interest, and expenses.

The Benitez family offered STI P644 million to settle the dispute which the latter had rejected.