March 17, 2014 7:04 PM
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MANILA – The real estate joint venture between the founders of fast-food giants Jollibee and Mang Inasal plans to take on debt once it completes its maiden share sale.
During Monday's investors briefing, DoubleDragon chairman Edgar "Injap" Sia II said the property developer is looking to raise P3 billion from the first tranche of a debt offering in the form of bonds or notes “a few months” after listing its shares in April.
The debt offering will augment the 2014 capital expenditure requirement of P6.35 billion to develop its CityMall chain. A total of P24 billion is needed to put up 100 CityMalls by 2020, making it the country’s largest branded community mall chain.
"That's why we went out of our way to list the company even if it was too small. We wanted to tap the bond and equity markets in the next few months. That's the main motivation...to increase the desirability of the bond or notes offering," Sia said.
DoubleDragon is raising P1.16 billion from the sale of up to 579.73 million primary offer shares at a maximum price of P2 per share, giving the real estate firm a market capitalization of up to P4.46 billion.
"Demand is strong even on the high side," said Eduardo Francisco, president of BDO Capital & Investment Corp, one of the joint lead underwriters of the initial public offering (IPO), alongside Unicapital Securities Inc and RCBC Capital Corp.
The offer will run from March 26 to April 1 with listing of the shares tentatively scheduled on April 7. The property firm will have a public float of 26 percent after the share sale.
In the next six years, DoubleDragon will have a million square meters of total leasable space, 700,000 square meters of which will come from the CityMalls and 300,000 square meters from other commercial and office developments, Sia said.
At present, about 95 percent of the business is sourced from residential projects. In the next six years, the mix will change with about 70 percent of the business coming from the rental side and 30 percent from residential development.
The expansion of DoubleDragon is hinged on the above-average economic growth of the Philippines, thus benefiting the real estate sector, said Ferdinand Sia, the company's president.
DoubleDragon has cleared all regulatory hurdles for its IPO, having secured the approval of the Securities and Exchange Commission and the Philippine Stock Exchange to launch its share sale.
DoubleDragon is a 50-50 joint venture between Injap Investments Inc and Honeystar Holdings Corp. Jollibee founder Tony Tan Caktiong owns Honeystar, while Sia II owns Injap Investments.
Jollibee Foods Corp (JFC) acquired 70 percent of Mang Inasal in 2010 for P3 billion, with Sia retaining the remaining 30 percent.
Incorporated as Injap Land Corp in 2009, the real estate arm of Injap Investments was renamed to DoubleDragon in 2012 with the entry of the Jollibee group.
http://www.interaksyon.com/business/82902/property-joint-venture-of-jollibee-mang-inasal-founders-plans-debt-sale-after-ipo
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