March 15, 2021
To: Balesin Members and Friends
It’s been a while since you heard from me, and there are a number of reasons regarding this, which I will explain in this update.
First of all, henceforth, I will be writing this update not only to Balesin Island Club members but also to The City Club members. I think that members of both clubs need to be informed of all major developments in Alphaland Corporation as a whole, since Alphaland operates both clubs.
BDO Unibank Financing Facility
The most significant development for Alphaland Corporation was the Php5.5 billion financing that we successfully negotiated and signed with BDO Unibank, the country’s largest bank. Aside from the obvious improvement in the financial position of Alphaland, this significant vote of confidence from the country’s largest bank tells an important story.
The BDO loan is for a term of seven years, with a one-year grace period. Aside from the improvements on our borrowing cost, and the fact that we no longer have to deal with several banks, the BDO loan facility will enable us to repay all of Alphaland’s existing bank debt amounting to about Php4 billion. The balance of Php1.5 billion will be available to fund new or ongoing projects such as the Alphaland Baguio Mountain Lodges and the Balesin Gateway (Patnanungan Island) projects.
This major loan facility is without doubt the most significant milestone since our “divorce” from Ashmore three years ago. The 2016 Annual Report The 2016 Annual Report is just “hot off the press” and may be viewed by all of you by connecting to:
Those of you who may want hard copies can email us c/o firstname.lastname@example.org and request one.
Let me just quote from the Chairman’s letter which sums up the financial highlights of the year just passed:
“Alphaland achieved record profitability in 2016, despite a challenging environment. From a comprehensive 2015 net income of Php7.2 billion, the company’s audited financial statements for 2016 showed an increase of 7.5% to Php7.7 billion. The company’s net worth increased by 17.2% from Php44.7 billion in 2015 to Php52.4 billion in 2016. On a per share basis, the company’s earnings were Php5.56 in 2016 as compared to Php4.50 in 2015, a net increase of 23.6%, and the net book value per share was Php41.14 at the end of 2016 as compared to Php35.07 in 2015, or an increase of 17.3%.
The company’s balance sheet continues to be exceptionally strong with its conservative debt/equity ratio (debt of Php5.5 billion and Php52.4 billion in equity or 10.5% debt-to-equity ratio). This is the exact opposite of most property companies, where the equity is typically much smaller than the debt component. Thus, the borrowing capacity of your company remains strong.”
Balesin Developments – 2nd ATR 72
Let me now update you on the new developments for Balesin. In addition to the runway night lights which became operational some three months ago, we have acquired a second ATR 72-500 and this will be delivered to us and will be operational this month of March. Taken together with the night flight landing capability at Balesin, we are now able to handle as many as 500 members and guests on a daily basis, obviously a major game changer for Balesin. As I have said on many previous occasions, the congestion at NAIA will get worse before it gets better and so we have addressed this problem frontally and with dispatch.
Since early in January, we have been scheduling night flights to and from NAIA and Balesin. There is a major advantage in that night flights are exempted from the noontime to the 7:00 pm “curfew” for private aircraft at NAIA. We intend to fly as many night flights as our members and their guests will require. I myself when I go to and from Balesin prefer the night flights. Night flights have a major advantage in that you can arrive in Balesin on Friday night, and/or depart Balesin for Manila on Sunday night after dinner. This allows our members and guests to enjoy full days in Balesin instead of the previous situation where one had to take a very early morning flight from Manila to Balesin or vice versa, which posed a major inconvenience in that one had to wake up very early to catch the flight and thus cut the day short instead of enjoying a full day in Balesin.
We have also noted a significant increase in members wanting to take the flight to and from Balesin from Clark rather than NAIA. Many of you who live in the northern part of Metro Manila find that it takes about an hour to get to Clark, as opposed to having to traverse the heavy traffic in EDSA for as much as two hours to get to our hangar in NAIA.
I am also pleased to report to you that we are now a registered locator at Clark and thus, we are able to import all of our aircraft, spare parts and other operational requirements, duty-free. As an example, for our second ATR we would have had to pay some Php10 million in customs duties and other fees, had we not had a Clark locator registration. I have now also authorized a major expenditure to improve our facilities at Clark for the convenience of our members and guests.
We also have several new projects at Balesin which we are targeting to complete and show off to you before the end of this summer:
We are now building a superb “Private Villa” on one of the best beachfronts in Balesin. The Private Villa will be a smaller but equally charming version of The Balesin Royal Villa. This will be located on one of the best beachfronts on the island, which is between Rico’s Hideaway and the Balesin Seafood Shack.
The Balesin Private Villa will consist of eight interconnecting villas, each with a full sea view, a main salon and dining facilities, plus a lower ground game room, much like the game room and karaoke facilities at The Royal Villa, all totaling about 2,400 sq. m.
This private villa will be located on 6,000 square meters of land, and the eight private villas will be able to accommodate as many as 32 guests. The two wings which will consist of four villas each, will wrap around an enormous swimming pool, all facing the sea. The Private Villa will have its own kitchen facilities and will be perfect for family reunions, corporate conferences, or “bonding” sessions, class reunions and other events.
Rico Sison has produced another one of his masterpieces, the floor plan of which I attach at the end of this update.
We have also decided to increase our focus on our aquaculture and organic farm facilities. Our Balesin Island crabs have become a big hit with members and guests and we are constantly unable to meet the demand. Thus, we have decided to transform two of the aquaculture farms in the Picnic Grove into additional crab farms where our Balesin crabs seem to thrive better than in the northern part of the island.
In addition to expanding our crab-growing facilities, we have also decided to embark on a major sea bass farming project. With the pristine sea water around Balesin Island, this is envisioned to be a major addition to the Lapu Lapu we already offer, which amount to an average of about 50 kilos a day that are caught by our Balesin Island fishermen.
Mike Asperin has also started an interesting table grape project. Those of you who have traveled to La Union around the Agoo and Aringay areas would have noticed the thriving grape industry there, which seems to like the sea breeze. When you come to Balesin next, you will surely see the half-hectare grape orchard which Mike is developing between the Banyan Tree Park and the entrance to the Spa, on the western part of the island. We have teamed up with one of the major growers in the La Union area for the project and have acquired the choice seedlings from them so that before Christmas this year, you will doubtless enjoy our newest project in Balesin: Table Grapes.
Let me now turn to our Makati projects. We have relocated all of our corporate offices which used to be at the Alphaland Southgate Tower, to our Makati Place complex. We have thus freed up two floors at the Southgate Tower for rental by mostly business outsourcing operations, which are very much in demand at our Southgate facility because it is connected to the MRT. We have now completed a number of improvements at Makati Place and have optimized previously unutilized or underutilized spaces to house our corporate offices and to develop new facilities for our members. We have several new seminar rooms, and expanded our Board Room which is available for our members.
Those of you who have also been to Makati Place recently will have noticed “UpMarket,” which we have established on the Ground Floor of The Shops. UpMarket is a collection of high-quality gourmet and organic food, unique accessories, and gifts which have proven to be quite popular among our shoppers and generally has added to the aesthetics of our shopping mall.
I am also pleased to report that under the able management of General Manager Nic Belasco, our patronage of The City Club has increased by more than 30% since he took over three months ago. Nic has added a number of new features, such as the Band Nights which feature different bands on most nights of the week. The sports offerings have also been enhanced by the addition of a number of new attractions (such as Yoga classes, Ballet lessons and Triathlon training), which have proven to be quite popular among our members and their guests.
We shall soon be adding a new restaurant on the fourth floor, a Greek restaurant (Mykonos), serving the same menu as our Thanassis Taverna in Mykonos Village on Balesin, which is one of our most popular restaurants on the island.
Aegle Wellness Center
Now, a word about our Aegle Wellness Center. Like many of my friends, I have become “addicted” to Aegle and I have never felt better in all of my life. Dr. Ben Valdecañas and his team all specialize in preventive medicine, and their recommendations include diet, exercise, and supplements, based on a thorough diagnostic analysis of each client. Since we opened Aegle just over a year ago in both The City Club and Balesin Island, we have had many very happy and healthier members and guests.
If you have not tried Aegle yet, I encourage you to do so – you will not only like it, you will live longer!
Baguio Mountain Lodges
Despite a few delays in the regulatory process, our Baguio Mountain Lodges project continues to progress. The first shipment of precut logs from Finland has arrived and we target to be able to have you view the Clubhouse and the first model unit within the next two months. We continue to have a steady stream of visitors to the project and without exception, they are delighted with the charm and facilities. Without doubt, it is going to be the “Forbes Park” of Baguio within the next couple of years.
We have now acquired most of the land at our Balesin Gateway Project (Patnanungan) and will soon be moving into the regulatory aspects. The first Master Plan has now been completed, and it will have an international airport, with a 2,500 meter runway, a 300-room hotel, an 18-hole golf course and about 500 privately owned beachfront and golf course homes. We are now in the market for a Hongkong-Macao style jetfoil ferry which can travel to and from Balesin in half an hour to 45 minutes.
All of the above activities have taken a lot of my personal time, particularly negotiating the Php5.5 billion loan facility with BDO Unibank. As our financial footing is now firmly on solid ground, we will be moving faster in the future to bring you more and more of the good life!
ROBERTO V. ONGPIN