Ferronoux and Themis to build mixed-use developments

Ferronoux Holdings [FERRO 4.16, down 4.4%; 25% avgVol] [link] provided comprehensive disclosure on its sale of a 23.5% stake to Themis Group for P80 million, justifying the transaction as part of its pivot into real estate development of master-planned mixed-use developments that FERRO refers to as “self-sustaining communities.” The developments will include residential, commercial, and “recreational spaces”. FERRO called this deal with the Themis Group as “the first step in materializing this new venture,” as it intends for Themis Group to help FERRO “navigate the complexities of real estate acquisition and development.”

MB bottom-line: Sounds a lot like a Megaworld [MEG 2.15 unch; 108% avgVol] township to me, and you all know how I feel about townships. My biggest gripe with MEG’s use of townships is related to how so many of the performance metrics that would be useful to investors are hidden by the township development model. That kind of non-transparency isn’t a necessary feature of the township development model. It’s possible for MEG to report its results segmented by township, and to provide deeper insight into what makes certain townships more profitable than others, but they don’t. By the same token, it’s not automatic that FERRO will behave in the same way, but that’s a risk for investors according to how we’ve seen the township model implemented to date. 

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