GT Capital Holdings Inc., the investment company of the Ty family, is unloading a 51-percent stake in mass housing developer Property Company of Friends Inc. in exchange for real estate properties valued at P20 billion.
GT Capital said in a disclosure to the stock exchange late Friday it signed an agreement on the redemption by Pro-Friends’ of the conglomerate’s preferred shares, equivalent to a 51-percent ownership in the mass housing firm.
GT Capital, in return, will receive 702 hectares of selected assets worth P20 billion.
The 702-hectare properties are located mostly within Pro-Friend’s 1,600-hectare Lancaster New City—a master planned, mixed-use development in Cavite province.
“This amicable proposed redemption allows both parties to focus on our respective areas of expertise,” GT Capital vice chairman Alfred Ty said.
“I look forward to a master-planned community that will integrate the needs of existing residents, as well as those of the development’s future population, for many generations to come,” Ty said.
LNC is Pro-Friends’ flagship and largest property development project.
The properties to be transferred to GT Capital in LNC include land bank strategically located along Daang Hari Extension and the future Cavite-Laguna Expressway and linked to Manila-Cavite Expressway.
“Given the scale of future redevelopment being considered, the existing residents within LNC will stand to gain significantly from the adjacent areas,” Pro-Friends president Guillermo Choa said.
The transaction is subject to regulatory approvals.
GT Capital initially acquired a 22.68-percent interest in Pro-Friends for P7.24 billion in 2015 and exercised the option to increase its direct holdings within the next three years.
The acquisition enabled GT Capital to venture into the mass housing development and complemented the real estate development business of unit Federal Land Inc.
GT Capital decided to accelerate its subscription in Pro-Friends by subscribing to an additional 28.32 percent direct equity stake for P8.76 billion in June 2016. The subscription increased the GT Capital’s stake in Pro-Friends to 51 percent.
Pro-Friends realized revenues of P10.4 billion in 2018, up 50 percent from P6.9 billion in 2017. Net income rose 63 percent to P1.2 billion in 2018 from P723.1 million in 2017.
Pro-Friends also has residential projects in other parts of Cavite province and Iloilo province.