MASS housing developer 8990 Holdings Inc. said its upcoming cable and internet subsidiary is expected to have a captive market of more than 40,000 housing units built by the company.
“The tentative name is 8990icable. We intend to create and operationalize our cable and internet unit this year,” Jesus Januario Atencio III, 8990 Holdings president and chief executive officer, said in a text message.
He said the planned subsidiary is yet to be formed in the coming days with an initial investment from the company of P17 million.
In a statement, 8990 said the new arm will service the cable and internet needs of more than 30,000 homes under the 8990 brands—DECA Homes, Urban Deca Homes, and Urban Deca Towers—as well 11,000 more units expected to be built and completed this year.
“Our intention is to provide a cable internet and telephone connectivity service for each and every DECA Homes homeowner. This is consistent with our mission to provide not only solid houses to our target market, but also the amenities for their family to have a productive and meaningful life,” Atencio said in a statement.
“A captive market of an estimated 30,000 homeowners across the country can maximize this service soon. In the same way, the expansion of 11,000 units this year will add to the market for the cable and internet company we have decided to put up,” he added.
“Our entry in providing cable and internet connectivity to our homeowners will also increase our shareholder value in terms of providing a long-term, sustainable source of recurring income,” Atencio said.
Last week, the 8990 board of directors approved a bond offer of to P9 billion to partially pay off debt “indirectly finance” their projects. The planned bond issue consist of a main offer of up to P5 billion with a P4-billion oversubscription option.
The company is targeting net income of P4 billion this year and revenues of P10 billion. It is looking at a spending program of P8 billion this year, up from P7 billion last year, with P3 billion to be used for land acquisition and P5 billion for operational expenditures including for direct costs, land development, and house construction, among others.
The mass housing developer said its net income last year rose 54 percent from a year earlier to P3.3 billion and exceeded its profit target of P3 billion. Revenues also advanced by 48 percent to P7.9 billion from P5.3 billion in 2013.
The company expects to hit its land bank target of 500 hectares this year—worth an estimated P25 billion of residential projects—as it anticipates to close land acquisition deals in Davao, Cebu, Bacolod, San Fernando City, Pampanga, and Zamboanga. To date, the company has around 400 hectares of land bank.
Formerly an IT and telecommunications firm, 8990 Holdings is engaged in building-low cost and affordable housing units, but is now diversifying into the medium and high-rise residential segment through partnerships with industry players.