Third party to appraise real estate assets of CAP

The Securities and Exchange Commission (SEC) will meet with the trustee banks of College Assurance Plan Phils. Inc. (CAP) to discuss whether they could adjust the valuation of the pre-need firm’s assets.

SEC Chairman Lilia R. Bautista said the trustee banks have agreed to hire a third party appraiser to come up with a fair value of CAP’s real estate properties.

This after CAP asked for a higher valuation of its real estate properties in its trust fund.

In particular, CAP asked its trustee banks to recognize the value of developed properties which were previously valued when they were still undeveloped.

It also wants its trustee banks to recognize real estate inventory or unsold land at the end of five years including outstanding accounts receivables at the end of five years.

CAP also wants its trustee banks to recognize a portion of the MRT bonds that are not reflected in its financial statements.

CAP First Vice-President Bobby Café said the Sobrepeña-controlled pre-need firm has enough assets that can be made to grow to P20 billion to match the P17.2 billion variance in its trust fund assets as of end-December last year.

Café said the pre-need giant is, in fact, projecting a P3- billion surplus over a 30-year period instead of a P17- billion deficiency in its trust fund should trustee banks agree to adjust the valuation of CAP’s assets.

CAP hopes to include the following real estate assets in the computation of its trust fund: the Nasugbu Harbor Town project, (P429 million); Canyon Woods in Tagaytay, (P341 million); and investments in Naic Properties.

Based on its five-year capital build-up program approved by the SEC, CAP intends to convert some assets into equity which would be added to the trust fund, generate interest income from loan programs, raise dividend income and secure fresh equity from interested investors.

Café said CAP is now in talks with three foreign investors for the possible infusion of at least $100 million in fresh equity or loan.

One investor group, based in North America, wants to come in as a strategic partner. The other group is an Asian fund manager while the third group is represented by investment bankers.

The Asian fund manager, according to Café, is dead serious in investing in CAP notwithstanding the latter’s financial position.

The North American company, on the other hand, wants to enter into a strategic partnership with CAP and tap the pre-need firm’ s 60,000 agents. It offered to infuse $100 million in exchange for an equity in CAP.

Negotiations with the prospective investors are expected to be concluded end this month or by fourth quarter this year as investors have yet to conduct their respective due diligence audit.

Café said the entry of the foreign investor would be made through the issuance of preferred shares