ALI, CHI merge; execs pledge to grow investments in Cebu

·3 min read

CEBU Holdings Inc. announced on Wednesday, April 14, 2021, that it is merging with parent company Ayala Land Inc. with the latter as the surviving entity.

“2021 will be another year of change for CHI as we consolidate with parent company Ayala Land Inc. With this merger we expect to achieve operational synergies, more efficient funds management and simplified reporting to government agencies. This development will also create a wider share of shareholder base, increasing liquidity and allowing investors to focus on one listed company,” said Ana Ma. Margarita Dy, president of CHI, during the firm’s virtual 2020 Annual Stockholders’ Meeting.

The consolidation also covers CHI’s subsidiaries and affiliates such as Asian I-Office Properties Inc. (AiO), Arca South Commercial Ventures Corp. (ASCVC) and Central Block Developers Inc. (CBDI).

ALI, also a publicly listed company, owns 71.1 percent of CHI. CHI owns 100 percent of AiO that owns and operates the e-Bloc Towers 1 to 4 office buildings located in Cebu IT Park and 55 percent of CBDI that owns and operates Ayala Malls Central Bloc, Seda Central Bloc and two office towers while ALI owns the remaining 45 percent stake. ALI also wholly owns ASCVC.

“The rationale of the merger is to allow us to consolidate ALI’s portfolio in Cebu under one listed vehicle, thereby creating a unified story and platform for our Cebu investments. By merging with ALI, we will address the current low public shareholder base of CHI,” said Ma. Divina Lopez, chief financial and compliance officer of CHI.

CHI was formed in 1988. For the past 32 years, the company was able to successfully establish two Philippine Economic Zone Authority-accredited business parks – Cebu Business Park and Cebu IT Park, and three emerging master planned estates.

“Central Visayas is the largest contributor to gross domestic product outside Luzon. And being the largest economy in this region, Cebu has been and will continue to be an important market for Ayala Land. With the merger and simplified organization, we will be in a better position for growth as we harness the power of the Ayala Land organization and the strength of the brand. We look forward to more projects and estates in the province,” Dy said. “We are committed to the Cebuanos and we will remain attuned to the community’s evolving needs.”

CHI ended 2020 with P2.9 billion in revenues and a net income of P392 million. These reflect a 39 percent and a 76 percent decline in revenues and net income, respectively from 2019. The decline was caused by the Covid-19 pandemic which resulted in community quarantines, temporary closure of malls and limited movements of consumers.

Despite the impact of the pandemic, Dy said CHI was able to keep a healthy balance sheet. Its debt to equity ratio stood at 0.64.

“As the business climate improves, we will resume the construction of Ayala Malls at Gatewalk Central Mandaue, break ground on our hotel in Seagrove Mactan and complete our co-living facilities at the Cebu Business Park and Cebu IT Park,” said Dy. (KOC)