1. AEV

LIMA Land has announced the start of a new project
(AEV, Php41.30; BUY, TP:Php48.57)

In order to take advantage of predicted demand from business process outsourcing (BPO) organizations for office spaces outside of Metro Manila, LIMA Land Inc., a subsidiary of Aboitiz InfraCapital Inc., will construct a seven-tower office complex in Batangas. Aboitiz InfraCapital Inc. is the infrastructure division of Aboitiz Equity Ventures Inc., which is a private equity firm (AEV).

A 30-hectare central business area, which includes commercial components such as The Outlets at Lipa, LIMA Exchange, LIMA Park Hotel, and LIMA Transport Hub, would be developed to accommodate the office complex. The construction of the first of the seven skyscrapers is expected to begin later this year. The cost of the project and the sources of funding are still being worked out in the last stages.

Aside from that, LIMA Land is offering for sale 4 hectares of its commercial lot inventory in the central business area, with lots ranging in size from 1,800 to 5,000 square meters. To date, 46 percent of the total commercial lots have been sold, with the purchasers of the lots able to begin building by the first quarter of 2022. Besides that, LIMA Land is developing more than 100 hectares of its existing 794-hectare property, with completion expected in the third quarter of 2022.

Aboitiz InfraCapital Inc., which oversees LIMA Land, contributed Php968.0mn in EBITDA to AEV in the first quarter of this year, accounting for 6 percent of the group’s overall EBITDA.

2. FLI / FILRT

FILRT to price IPO at Php6.70-7.30 range
(FLI, Php1.16; BUY, TP:Php1.41)

Filinvest REIT Corp. (FILRT), the real estate investment trust sponsored by Filinvest Land, Inc. (FLI), has advised on a price range of Php6.70-7.30 per share for its first public offering, which is lower than the maximum price of Php8.30 per share set by the company. At the top end of the recommended range, FLI is issuing 1.63 billion secondary common shares, as well as an overallotment option of 163.4 million shares, for a total potential raising of Php11.9 billion.

According to the recommended price range, FILRT intends to distribute Php0.2195 and Php0.4633 in dividends per share in 2021 and 2022, respectively. This corresponds to an annualized yield of 6.0 percent -6.6 percent in 2021 and a 6.3 percent -6.9 percent in 2022, according to the indicated price range. Purchase of FLI shares will generate funds for capital expenditures for FLI’s residential and industrial projects as well as for raw land purchases.

The proceeds of the share sale will be utilized for these purposes. The pricing date has been set on July 19th. The offer period will run from July 26 through August 3, with a target listing date of August 12 established as the end date.

3. LTG

VMC has received permission from the ERC to construct a transmission line for a 40MW biomass facility
(LTG, Php11.00; BUY, TP:Php15.20)

Vickers Victorias Milling Company, Inc. (VMC), a subsidiary of LT Group, Inc. (LTG), has received permission from the Energy Regulatory Commission (ERC) to construct and own transmission infrastructure that would link its 40MW biomass-fired cogeneration power plant to the Visayas grid. In contrast to this, VMC will not be able to manage and maintain the transmission lines, which will be handled instead by the National Grid Corporation of the Philippines.

The transmission lines would enable VMC to sell surplus produced electricity back to the grid.. Out of the plant’s total capacity of 40MW, 25MW can currently be used to meet the needs of VMC’s internal operations; the remaining 15MW would be excess energy that could be supplied to the grid. The firm anticipates that this would result in an increase in yearly sales of about Php100.0 million.

VMC runs one of the biggest sugar milling and refining facilities in the nation, which is located in Negros Occidental. VMC had sales of Php6.3 billion and a net profit of Php636.8 million for the nine-month period ended May 31, 2021. LTG, on the other hand, has a 30.9 percent interest in VMC. VMC generated equitized net profits of Php66.0 million for LTG in the first quarter of 2021, accounting for one percent of LTG’s core net income.

4. PHA

Is there a backdoor on PHA?

According to unnamed sources, PHA would serve as a backdoor listing vehicle for Marvin dela Cruz’s SquidPay company. According to the sources, SquidPay holders would purchase a majority stake in PHA using cash and SquidPay shares as payment. Of the P925mn, P300mn was to be paid in cash, and the remaining P625mn to be paid in a combination of cash and/or injection of SquidPay shares over a two-year period.

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