Listed property firm 8990 Holdings Inc. plans to borrow up to P9 billion from the capital market via a bond issue for debt repayment and to finance its projects.
In a disclosure to the stock exchange, the company said its board of directors has approved the offering and issuance of up to P5 billion of corporate notes with an oversubscription option of P4 billion.
It appointed BDO Capital and Investment Corp. and First Metro Investment Corp. as joint issue managers and lead underwriters.
8990 Holdings president Jesus Januario Atencio III said that the bond offering will “balance out the company’s long-term receivables and long-term debts” and will “indirectly” finance its project lineup for the year.
He said the bond offer will be launched on May 14.
The company has yet to submit a registration filing to the Securities and Exchange Commission for regulatory approval.
In the same disclosure, the company said its board also approved a proposed investment in a new or existing subsidiary to provide cable and internet services to its housing clients.
Atencio said the company has not determined yet whether it will be a new unit or under an existing subsidiary, but 8990 Holdings will put down P17 million for the initial investment.
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.