Alliance Global Group Inc., the holding company of tycoon Andrew Tan, unveiled a P410-billion capital spending program for 2020 to 2024 to bankroll the expansion of core businesses.
AGI said in a disclosure to the stock exchange Monday the new five-year capital spending program would exceed the P377-billion capital expenditures for 2015 to 2019, inclusive of this year’s budget of P85 billion.
It is also bigger than the P218-billion capex for 2010 to 2014 at a time when AGI forayed into the international market.
“Our five-year capital spending program signals our ongoing thrust to pursue an aggressive but organic growth strategy for our various businesses. It is our intention to continue to reinvest in these businesses to sustain our growth pace,” AGI chief executive Kevin Tan said.
Roughly 73 percent of the group’s five-year capital spending plan will be allocated for property unit Megaworld Corp.
This will fund the property firm’s new and ongoing township development projects, planned residential launches and continued buildout of offices, lifestyle malls, and hotels throughout the country.
A portion of the budget will be allocated for the company’s landbanking strategy to add to its current 4,700 hectares of developable land.
AGI’s gaming arm Travellers International Hotel Group Inc. will account for another 15 percent of the group’s programmed spending.
This will be used to fund the company’s next integrated resort, Westside City Resorts World, which is situated on a 30.5-hectare property at Pagcor Entertainment City complex in Parañaque.
Golden Arches Development Corp. which holds the exclusive franchise to operate quick service restaurants in the Philippines under the “McDonald’s” brand will get about 5 percent of the group’s capital expenditures.
This will be used to roll out 50 to 60 stores annually for the next five years.
Liquor firm Emperador Inc. will account for 4 percent of the group’s budget to fund largely maintenance spending after its heavy investments since 2014.
Emperador is now pursuing an organic growth strategy by fortifying its global distribution system for its premier whiskey products under Whyte and Mackay and Spanish brandy products under Bodegas Fundador.
The company is also expanding its product mix in the domestic market with the introduction of The Bar Premium Gin while it maintains market leadership in the brandy segment with flagship Emperador Brandy.
Meanwhile, the balance of 3 percent will be allocated for Infracorp Development Inc. largely to fund its infrastructure projects, the 2-kilometer Fort Bonifacio-Makati Skytrain monorail project and the rehabilitation of the Ninoy Aquino International Airport.
Both are awaiting Neda approval and are looking to start the project implementation soon.