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FDC eyes equity, offshore debt to fund expansion

By James A. Loyola

Gotianun family-led Filinvest Development Corporation (FDC) is considering to raise funds from both debt and equity to support its P25.7 billion capital expenditure program this year.

During the firm’s online annual stockholders’ meeting, FDC President and CEO L. Josephine G. Yap said they will continue diversification to defensive industries as the effects of the pandemic is seen to last for some time.

FDC will concentrate on strengthening its recurring income base comprised of power, office and logistics leasing in property, and its new investments in renewable energy and environmentally friendly urban solutions under a build-operate-transfer business model.

“As of year-end 2019, leasing, power and sugar contributed close to half of FDC’s bottom line. The steady stream of income from these three segments, coupled with contributions from EastWest Bank, puts us in a solid position to address the forthcoming challenges posed by the COVID-19 pandemic,” said Yap.

She added that, “The business segments in the Group have been on expansion and diversification modes and it shall continue to do so in the future. We are also on the lookout for possible acquisitions. To maintain such posture, it is imperative to strike a capital structure with a careful balance of equity and debt.”

The firm is exploring tapping the offshore debt market via foreign currency denominated long-term bonds given the prevailing attractive offshore debt environment.

“FDC is especially keen to raising equity, not only to support the expansion of its subsidiaries but also to unlock its untapped value and share this to the public,” said Yap.

She explained that, “Currently, public ownership in FDC is at 10.8 percent. Providing liquidity and marketability in FDC’s shares will no doubt redound to the benefit of all its stakeholders. We are awaiting the right timing for such an offering.”

Proceeds will be used, in part, to finance the capital expenditures budget of P25.7 billion set for 2020. With P132 billion in equity, the conglomerate’s balance sheet remained healthy with a net debt-to-equity of 0.54:1 at the end of the first quarter.

New endeavors of the Filinvest group in the eco business field of providing environmentally friendly solutions also provide recurring income.

Filinvest will be pouring its resources on the development of the 288-hectare Filinvest at New Clark City. 128 hectares will be zoned for the Filinvest Innovation Park.

It’s property subsidiary Filinvest Land Inc. (FLI) is looking at constructing high specification logistics structures for lease apart from the more traditional leasing of big lot parcels for factories.

The first phase of the Filinvest Innovation Park in New Clark City is due for completion by the second half of 2020.

Another logistics park is set for launch in Calamba, Laguna beside the fully sold Filinvest Technology Park. FLI is launching a 20-hectare development to address the anticipated higher demand for ready built warehouses of the growing logistics and e-commerce industry.

The Filinvest property subsidiaries aim to increase its residential leasing portfolio through its newest co-living space product–dormitels which are designed as affordable yet comfortable and secure residences near the workplace.


Source: Manila Bulletin (https://business.mb.com.ph/2020/06/22/fdc-eyes-equity-offshore-debt-to-fund-expansion/)

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