Profriends expected to shelve initial public offering

MANILA, Philippines - Profriends Group Inc. is seen shelving its initial public offering (IPO), following the buy in made by GT Capital Holdings Inc.

GT Capital first vice president Jose Crisol said the conglomerate’s entry into Property Company of Friends (PCFI) provides it the funding it needs to raise through an IPO.

“This is an alternative (way to raise funds), which is more strategic because they have GT as a strategic partner,” Crisol said.

He said GT Capital has the funding whereas in an IPO, there is no strategic partnership involved.

Furthermore, he said PCFI could also benefit from cross-selling initiatives under which GT Capital’s banking businesses, PSBank and Metrobank, could provide housing loans to buyers of PCFI’ housing units.

Analyst Justino Calaycay of Accord Capital said the partnership may have already met Profriends’ funding needs.

“We’ll see. Maybe GT Capital may eventually list it,” Calaycay said.

Profriends officials were not immediately available for comment.

On Friday, GT Capital, the George Ty-owned conglomerate, announced it has signed an agreement to acquire a minority stake in PCFI, a move that expands its presence in the low-cost segment.

The holding company acquired a 22.68 stake in PCFI, a subsidiary of Profriends Group, for P7.24 billion, with an option to increase its direct shareholding to 51 percent within the next three years.

GT Capital chairman Francisco Sebastian said with the acquisition, the company hopes to become a market leader in the low-cost housing sector.

“We view this acquisition as a mutually beneficial partnership for both parties. PCFI has the product expertise and the strategic land bank, while GT Capital has the financial resources and access to capital. Our partnership adds a new dimension to GT Capital’s property development portfolio and will enable our group to be one of the market leaders in the low-cost housing sector,” Sebastian said.

PCFI decided to sell the stake to GT Capital as it believes the partnership would strengthen the property company.

“The low-cost housing segment is the real sweet spot in the country’s property sector, with a supply shortage of over three million homes, which continues to grow annually. Our partnership with GT Capital will strengthen our ability to be a leading player in serving this urgent market need,” said Guillermo Choa, PCFI chairman.

The parent company, Profriends, has been planning to list in the local bourse later this year.

Originally set in October 2014, the company aimed to raise as much as P7.7 billion in fresh funds with 385.75 million primary shares at a price of up to P20 per share.

The Securities and Exchange Commission, the corporate regulator, approved the listing in December last year.