October 28, 2014

To: Balesin Members and Friends


After almost two years of complex and sometimes difficult negotiations, I am delighted to inform you that on Friday, October 17, 2014, Alphaland finally completed all agreements, with all parties involved, regarding its disengagement with the Ashmore Group.  On that day, a block sale at the Philippine Stock Exchange of 1.3 billion Alphaland shares from a group of shareholders led by Alphaland Holdings (Singapore) Pte Ltd (a company owned by funds managed by the Ashmore Group) to Alphaland Corporation was executed.   I can finally breathe a sigh of relief and look forward to doing more productive things and moving forward as a private company.

In order for you all to understand accurately what this disengagement means, Alphaland transfers the following assets, together with all attendant liabilities, to Bedfordbury Development Corporation (the joint venture company of Mr. Eric O. Recto and Ashmore): (1) the Alphaland Tower on Ayala Avenue, (2) the Alphaland Marina Club project, (3) its 50% ownership in the Alphaland Bay City joint venture, and (4) its 60% ownership in the joint venture known as Boracay Gateway.

In return, Alphaland receives all of Ashmore’s shares in the corporation plus PhP 2.5 billion in cash.  Additionally, Alphaland retains ownership of the following projects: (1) the Balesin Island Club, (2) the Alphaland Makati Place complex, including The City Club, (3) the Alphaland Southgate Tower and Mall, that gleaming blue building on the corner of EDSA and Chino Roces Avenue, which marks the gateway to Makati, and (4) the Baguio Mountain Lodges project. 

The financial implication of this transaction is as follows: Alphaland’s total assets have decreased to PhP 48 billion but its liabilities have likewise decreased to only PhP 11 billion. Thus the net worth of Alphaland is still a substantial PhP 37 billion.  With this robust balance sheet after its disengagement with Ashmore, Alphaland will continue to be one of the most substantial property companies and with a solid financial base.  Notably, Alphaland’s debt-equity ratio is now a very comfortable 24% debt to 76% equity, clearly a position which results in Alphaland having a huge unutilized borrowing capacity, in addition to a “war chest” of PhP 2.5 billion in cash.

Some media reports, which have not comprehended the correct effects of this disengagement, have portrayed Alphaland’s delisting from the Stock Exchange in a negative light.  In fact, the opposite is true, which can easily be seen from the following: (1) As a private company, Alphaland will no longer be under the jurisdiction of the PSE and can operate as a more nimble company;  (2) The acquisition by Alphaland of Ashmore’s shares in the company will result in my group owning over 90% of the company, without having to be concerned with the 10% minimum public ownership requirement of a listed company; (3) Alphaland should never have been a listed company to begin with, as its investments have been financed almost entirely by equity contributions from Ashmore and the undersigned.  It has never found the need to use the facilities of the Exchange to raise funding; (4) As a private company, Alphaland can, with its excellent track record, raise money for its future expansion from both domestic and foreign sources, either in the form of equity or debt.

Finally, I would like to put on record that I will always be grateful to the Ashmore group for their early and strong support, without which Alphaland would never have seen the light of day.  I also wish to express my gratitude to Mr. Eric O. Recto, without whose patient and diligent efforts, this happy ending could not have been achieved.



As Seen In