MASS housing developer 8990 Holdings Inc. plans to bring in foreign and local partners to its soon-to-be established cable and internet subsidiary—tentatively named 8990icable—which will provide cable internet and telephone connectivity to some 40,000 home buyers.
“We’re talking to several interested parties to partner with, including one foreign. Nothing has been formed yet as discussions have brought about more options, all interesting and worth studying,” 8990 President Jesus Januario Atencio told The Manila Times over the weekend.
“There is now a possibility to partner with not only one but two or several cable internet companies. Thus, the arrangement with each of them could be different, and so a wide range of options from buyout, supply agreement to joint venture are possible,” Atencio added, without naming the potential partners.
He said the company has yet to determine whether 8990icable will be a new unit or whether it will form part of an existing subsidiary but 8990 is putting down P17 million as its initial investment in the venture.
Meanwhile, Atencio said they expect to hit their land bank target of 500 hectares within the first half of this year.
“We’re now at 384 hectares. I hope to get the final 100-plus hectares this quarter with new purchases in the new branches I intend to put up in Bacolod, Zamboanga and General Santos,” Atencio said. “Our purchases may be completed in the first semester of the year,” he added.
Atencio said acquisition of the additional 100 hectares is well within the company’s P3 billion spending program for land banking initiatives this year. Of its total capital expenditure of P8 billion for the full year, P5 billion will go to operational expenditures such as direct costs, land development, and house construction, among others.
Earlier, 8990 dispelled rumors that its planned bond offering in May might be postponed or cancelled. It said the bond offering remains on track and will comprise a base offer of P5 billion and an oversubscription of P4 billion in case of strong demand. Proceeds will partly finance the company’s projects this year as well as refinance existing debt.
The company plans to build an additional 11,000 housing units this year, mostly in Luzon.
“We target 11,000 homes for 2015, majority [of them]in Luzon, which is good because Luzon is a new area for exploration and development. We are established in the Visayas and Mindanao, but there’s more competition in Luzon. If we can survive the competition, then we’re optimistic that we can grow to P10 billion in revenues,” Atencio earlier said.
Also for this year, 8990 is set to launch nine new projects comprising 4,486 units. It targets net income of P4 billion this year and revenue of P10 billion, anchored on strong demand fueled by a healthy economy, increasing overseas workers’ remittances and a housing backlog of some 4 million units.
Last year, 8990 Holdings recorded a 53 percent surge in net income to P3.3 billion from P2.18 billion in 2013, while revenue advanced 48 percent to P7.9 billion.
Formerly an IT and telecommunications firm, 8990 Holdings is a builder of low-cost and affordable housing units but has now diversified into the medium and high-rise residential segment through partnerships with industry players.