CHI merges with parent company

Ehda M. Dagooc (The Freeman) - April 16, 2021 - 12:00am

CEBU, Philippines — Thirty-two years after the Cebu Holdings Inc,, (CHI) was established, the Cebu-based publicly listed development firm will be dissolved through a merger with its mother company Ayala Land Inc. (ALI).

This, after the Security and Exchange Commission (SEC) approves the merger application, which was submitted early this year.

The consolidation move was formally announced during the virtual CHI Annual Stockholders Meeting (ASM) held April 14, 2021 by CHI president Ana Margarita Dy.

Consequently, ALI will assume the roles and responsibilities of CHI and the current employees in CHI will be retained within the Ayala Land Group, said lawyer Jeanette Japzon, CHI corporate communications manager.

Furthermore, Japzon said that the company will continue to collaborate with the partners, buyers, tenants and other matters relating to its projects in Cebu.

Dy explained to shareholders during the meeting that the consolidation also covers CHI’s subsidiaries and affiliates, namely; the Asian I-Office Properties Inc. (AiO), Arca South Commercial Ventures Corp. (ASCVC) and Central Block Developers Inc. (CBDI).

CHI, the developer of Cebu Business Park, where the Ayala Center Cebu shopping mall is located, the Cebu IT Park, and other ongoing projects, ended 2020 with P2.9 billion in revenues and a net income of P392 million. These reflect a 39 percent and a 76 percent decline in revenues and net income, respectively from 2019. The decline was caused by the Covid-19 pandemic which resulted in community quarantines, temporary closure of malls and limited movements of consumers.

According to Dy, the merger will create wider shareholder base and increase liquidity of shares.

“[The year] 2021 will be another year of change for CHI as we consolidate with parent company Ayala Land Inc. With this merger we expect to achieve operational synergies, more efficient funds management and simplified reporting to government agencies. This development will also create a wider share of shareholder base, increasing liquidity and allowing investors to focus on one listed company,” Dy further explained.

ALI, also a publicly listed company, owns 71.1 percent of CHI. CHI owns 100 percent of AiO that owns and operates the e-Bloc Towers 1 to 4 office buildings located in Cebu IT Park and 55 percent of CBDI that owns and operates Ayala Malls Central Bloc, Seda Central Bloc and two office towers while ALI owns the remaining 45 percent stake. ALI also wholly owns ASCVC.

In her report to shareholders, Ma. Divina Lopez, chief financial and compliance officer of CHI, said that the rationale of the merger is to “allow us to consolidate ALI’s portfolio in Cebu under one listed vehicle, thereby creating a unified story and platform for our Cebu investments.”

“By merging with ALI, we will address the current low public shareholder base of CHI,” Lopez added.

Significantly, the executives promised that while these companies now are under one roof, developmental investments will continue, considering that Cebu has been and will continue to be an important market for ALI, Dy said.

“With the merger and simplified organization, we will be in a better position for growth as we harness the power of the Ayala Land organization and the strength of the brand. We look forward to more projects and estates in the province. We are committed to the Cebuanos and we will remain attuned to the community’s evolving needs,” added Dy.

In fact, as soon as the business climate improves, ALI will resume the construction of Ayala Malls at Gatewalk Central Mandaue, break ground on its hotel in Seagrove Mactan and complete its co-living facilities at the Cebu Business Park and Cebu IT Park, which are now temporarily halted due to the lingering pandemic.

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