Boutique property developer Arthaland Corp. plans to raise P1 billion from the issuance of preferred shares.
Arthaland said in a filing with the Securities and Exchange Commission it would offer 10 million preferred shares at a price of P100 apiece.
The preferred shares to be issued will be the second and last tranche from the company’s P3 billion shelf registration filed with the SEC in 2016.
The company tapped BDO Capital and Investments Corp. as sole issue manager and book runner for the fund raising activity.
Arthaland plans to use the net proceeds from the offering to fund two residential projects, one in Cebu and another one in Makati.
Arthaland said it was in talks with the owner of prime property inside the foremost business district of Cebu City to jointly develop a 2,000 square-meter lot into a premier residential condominium project.
To fund the company’s estimated share in the Cebu residential project, Arthaland is allocating P300 million from the proceeds of the offering set to be disbursed in the second half of the year.
The property firm is also in discussions to acquire a 1,800-sq. m property in the Makati central business district. The property will be developed into a high-end residential condominium with 29,000 sq. m. of gross floor area.
Arthaland is allocating P530 million from the proceeds of the fund raising activity for the Makati project, with disbursement either in the last quarter of 2019 or the first quarter of 2020.
The company is earmarking P154 million for general corporate purposes, which may include funding working capital requirements, future acquisitions of property or the retention of retail or commercial units to increase recurring lease revenues.
Arthaland early this year announced plans to venture into mixed-use estate development starting with its eight-hectare property in Biñan, Laguna.
The company is acquiring more properties in Metro Manila and other key cities in the country to quintuple the number of completed projects under its portfolio in the next five years.
Share price of Arthaland on Thursday fell 1.3 percent to P0.77.