Empire East earmarks P700 million for 3 new developments

REPORT FROM BUSINESSWORLD EMPIRE EAST Land Holdings, Inc., a subsidiary of Andrew Tan’s Megaworld Corp., will spend P700 million for three new residential projects that will be launched in the fourth quarter this year. Following the company’s special stockholders’ meeting on Friday, Empire East President Anthony Charlegmane Yu said funds for the development of the condominium projects would be sourced from its annual capital expenditure allotment of between P1 billion and P1.5 billion. "We’ve already spent P800 million so there’s P700 million more to go. This will go to our upcoming projects namely, Little Baguio Terraces in San Juan, Pioneer Woodlands in Mandaluyong and San Lazaro Towers in Magallanes," Mr. Yu told reporters. Little Baguio Terraces will have 1,800 units, while Pioneer Woodlands will have 3,800. San Lazaro Towers will have 2,000 units. Mr. Yu said that Empire East was also negotiating with landowners for possible joint ventures. These prospective deals will be for projects aimed at the middle-income segment. "We should be able to sustain a growth in the middle-income market since we’ve been there even before the other developers have discovered its potential. We will not be aiming for higher income markets," said Mr. Yu. Rights offer Mr. Yu said Empire East was also seeking to raise P2.7 billion in a preemptive rights offering scheduled for January 2008. This was after shareholders approved the company’s increase in its authorized capital stock to P23.5 billion from P13 billion, through the creation of 10.5 billion new shares with a par value of P1 per share. With a ratio of one new share for every three shares held, the offering will "accelerate the development of the company’s projects, retire debts and finance acquisition of properties for future development." Mr. Yu said P1 billion from the proceeds would be used to develop and construct its projects; P800 million for the payment of debts, and P900 million for land acquisitions. "Our debt is around P2.5 billion, and we’re paying some of that to take advantage of the low interest rates," he said. For the first semester, the company’s net income went up to P74.2 million from P68.3 million in the same period in 2006. — Lovely Nica P. Lee/BusinessWorld