Filinvest holding firm allots up to P25 billion for 2024 capex

MANILA, Philippines — Filinvest Development Corp. (FDC), the investment holding company of the Gotianun family, plans to invest as much as P25 billion this year to expand its presence in real estate and power generation, as well as support its ongoing digitalization efforts.

FDC president and CEO Rhoda Huang said the conglomerate is earmarking between P20 billion and P25 billion in capital expenditures for 2024.

Coming from a strong 2023, the company plans to sustain its momentum this year.

FDC chief finance officer Brian Lim said bulk or about 60 percent of this year’s capex will be for developments under Filinvest Land Inc. (FLI).

Lim said 15 percent will go to power generation through FDC Utilities Inc. as the company pushes for more renewables.

The company currently has two ongoing solar projects, a 20-megawatt (MW) plant in Misamis Oriental and a 12-MW project in Cebu.

Lim said another 15 percent of the group’s capital spending this year is allotted for the hospitality sector to build additional hotels across the nation and in different cities.

The company is currently targeting to open a Grafik hotel in Baguio City by the first quarter of 2025.

Meanwhile, Lim said the the remaining 10 percent of FDC’s 2024 capex is allocated to other businesses and digitalization.

“We have projects to change our enterprise resource planning (ERP). Because right now, we have several ERP systems across the conglomerate. We want to convert into just one and we’re also enhancing our purchasing system, project management system and the management report and analysis and planning system,” FDC chief operating officer Ysmael Baysa said.

“So it’s a very big project which will affect practically all or most legal entities. The project started as early as 2021, the conceptualization. So the project’s been ongoing. It takes several years but the biggest investments are taking place this year,” he said.

FDC’s 2024 capex will be funded by a mix of debt and internally generated funds.

Last February, FDC raised P10 billion from the first tranche of its bond offering under shelf registration, proceeds of which will be used to partially finance maturing bonds redemption and capital expenditures to accelerate the growth of its businesses.

The issuance is the first tranche of fixed rate bonds totaling P32 billion under a shelf-registration program with the Securities and Exchange Commission.

Late last month, FDC’s board approved a proposed listing of preferred shares of the company.

“We can access multiple markets in terms of what FDC can access. So there’s bilateral loan, corporate note, fixed rate retail bond and preferred. We have a shelf registration for purposes of fixed income retail bonds and now we’re getting approval in terms of preferred shares listing. So either,” Huang said.

For the planned preferred shares listing, Huang said the company would “want to see the developments for the purposes of the capex budget utilization.”

“But it will not be early. If ever, it will be late fourth quarter or first quarter 2025 because we have funding in place for the purposes of the budgeted capex for 2024. We will be opportunistic,” she said.

FDC currently has strategic holdings in key industries such as real estate development and leasing through FLI and Filinvest Alabang Inc., banking and financial services through EastWest Bank, hotel and resort development and management through Filinvest Hospitality Corp., power generation through FDC Utilities and agriculture through Pacific Sugar Holdings Corp.