FDC eyes equity, offshore debt to fund expansion

Gotianun family-led Filinvest Development Corporation (FDC) is considering to raise funds from both debt and equity to support its ₱25.7 billion capital expenditure (capex) program this year.

During the firm’s online annual stockholders’ meeting, FDC President and CEO L. Josephine G. Yap said they will continue diversification to defensive industries as the effects of the pandemic is seen to last for some time.

FDC will concentrate on strengthening its recurring income base comprised of power, office and logistics leasing in property, and its new investments in renewable energy and environmentally friendly urban solutions under a build-operatetransfer business model.

“As of year-end 2019, leasing, power and sugar contributed close to half of FDC’s bottom line. The steady stream of income from these three segments, coupled with contributions from EastWest Bank, puts us in a solid position to address the forthcoming challenges posed by the COVID-19 pandemic,” said Yap.

She added that, “The business segments in the Group have been on expansion and diversification modes and it shall continue to do so in the future. We are also on the lookout for possible acquisitions. To maintain such posture, it is imperative to strike a capital structure with a careful balance of equity and debt.”

The firm is exploring tapping the offshore debt market via foreign currency denominated long-term bonds given the prevailing attractive offshore debt environment.

“FDC is especially keen to raising equity, not only to support the expansion of its subsidiaries but also to unlock its untapped value and share this to the public,” said Yap.

She explained that, “Currently, public ownership in FDC is at 10.8 percent. Providing liquidity and marketability in FDC’s shares will no doubt redound to the benefit of all its stakeholders. We are awaiting the right timing for such an offering.”

Proceeds will be used, in part, to finance the capital expenditures budget of ₱25.7 billion set for 2020. With ₱132 billion in equity, the conglomerate’s balance sheet remained healthy with a net debt-to-equity of 0.54:1 at the end of the first quarter.

New endeavors of the Filinvest group in the eco business field of providing environmentally friendly solutions also provide recurring income.