Global Estate doubling capital to P20 B

MANILA, Philippines - Global Estate Resorts Inc. (GERI) of property tycoon Andrew L. Tan is doubling its authorized capital stock to P20 billion.

In a disclosure, GERI said it secured the Securities and Exchange Commission’s approval to double its authorized capital stock into 20 billion shares with a par value of P1 each.

The higher capitalization will allow property giant Megaworld Corp. to buy more shares into the tourism estate developer.

Last month, Megaworld, Tan’s flagship property firm, announced its purchase of 2.5 billion common shares in GERI, subscribing to  25 percent of the 10 billion new shares of GERI.

In June, Tan spent nearly P8 billion to fold his real estate units into  Megaworld, which now owns 100-percent Suntrust Properties Inc., 23 percent of GERI and 80 percent of Empire East Land Holdings Inc.

GERI, a developer of integrated tourism projects in Boracay, Tagaytay and Batangas, accounted for P53 million of the P4.91-billion earnings of parent firm Alliance Global Group Inc., higher than the P35 million last year.

Megaworld’s property units, however,  will remain independent and listed in the local bourse.

Megaworld’s consolidation follow in the footsteps of Henry Sy’s SM Investments Corp., which merged mall developer SM Prime Holdings Inc., residential builder SM Development Corp., private firm SM Land Inc. and upscale Tagaytay Highlands developer Highlands Prime Inc. in a P279-billion transaction that created the country’s largest integrated property firm.

Early this year, Megaworld committed to spend a record P35 billion for its property projects  amid the property boom, up from P25 billion in 2012.

In the first quarter, profits of Megaworld jumped 15 percent to P1.79 billion on the back of brisk property sales.

In more than 20 years of operations,  Megaworld and its units have completed more than 240 residential and office buildings with a total floor area of around six million square meters.

Megaworld is the property arm of AGI, which is also into liquor (Emperador Distillers, Inc.), fastfood (McDonald’s franchise operator Golden Arches Development Corp.) and hotels and casino (Travellers International Hotel Group Inc.).