OUT of a capital infusion worth P280 million from a Caribbean investor, low-cost housing developer IRC Properties Inc. is spending P250 million to pay off outstanding debts that funded its projects.
In a disclosure to the Philippine Stock Exchange on Monday, IRC said Epsilon Sigma Fund Ltd., a firm based in Cayman Islands, is buying two million shares of stock of IRC at a subscription price of P1.40 per share for a sum of P280 million.
As it will get the capital infusion by March 4, IRC said this would help augment its financial condition and improve its operations.
“The company requires additional capital to partially settle its outstanding loans and for use in its projects,” IRC said.
The firm said the subscribed shares out of its unissued authorized capital stock would also be listed at the bourse as soon as practicable.
According to IRC, the P278 million proceeds from the private placement, net of listing expenses worth P2 million, will be spent mainly on settling the company’s outstanding debts, pegged at P250 million.
Also out of the new foreign capital, IRC Properties said it is earmarking P10 million for the development of its house-and-lot subdivision project Casas Aurora in Binangonan, Rizal by the first quarter of 2016.
Another P15 million, it added, would be spent to put up another housing subdivision around the second quarter of the year.
Meanwhile, P3 million will be paid to Mabuhay Holdings Group for land clearing around the second quarter of 2016.
IRC said the rest of its property development costs would come from subdivision project sales through the government home lending agency Pag-Ibig Funds.
IRC is a domestic firm established in February 1975, initially dealing in oil drilling operations, but later shifted to property development after acquiring 2,200 hectares of land in Binangonan town in Rizal province in 2012.
IRC now has three residential subdivision projects in the said property under joint-venture deals—Sunshine Fiesta, Fiesta Casitas, and Casas Aurora.