8990 unloads P3 billion worth of receivables

MASS HOUSING developer 8990 Holdings, Inc. unloaded close to P3 billion worth of receivables to generate cash for its projects.

In a disclosure to the stock exchange on Tuesday, 8990 Holdings said its subsidiaries entered into an agreement with Dearborn Resources and Holdings, Inc. for the transfer of the real estate firm’s contract-to-sell (CTS) receivables worth P2.8 billion.

The sale of receivables to Dearborn, a financial holding company based in Metro Manila, is on a non-recourse basis and is based on the outstanding principal balance of the CTS receivables.

8990 Holdings has been selling its receivables to the banking sector in previous years, helping the company increase its cash flow to fund its projects, a company official said in a mobile phone message.

The latest batch of receivables were sourced from 8990 Davao Housing Development Corp. (P215.50 million), 8990 Housing Development Corp. ( P1.80 billion), 8990 Luzon Housing Development Corp. (P559.96 million), 8990 Mindanao Housing Development Corp. (P5.45 million) and Fog Horn, Inc. (P248.78 million).

The CTS receivables were generated from the sale of housing units in 24 residential projects nationwide.

The company has developed a CTS Gold in-house financing program, allowing customers to pay a minimal downpayment and quickly move in to their homes. The company retains ownership of the homes until full payment is made by the homebuyer.

CTS Gold has two categories, namely: CTS Gold Convertible, which carries a fixed rate of 8.5% per annum and is intended for Home Development Mutual Fund (Pag-IBIG) take-up; and CTS Gold Straight, which carries an interest rate of 11.5% per annum and is not intended for Pag-IBIG take-up.

8990 Holdings, Inc. is setting aside P3 billion in capital expenditures this year to bankroll the construction of its projects and the acquisition of land properties.

At the same time, 8990 Holdings will be launching five projects located in Cebu, Iloilo, Ortigas, and Davao that will generate P60 billion in sales.

8990 Holdings saw a 22% decline in attributable profit for the first nine months of 2017 to P2.47 billion, weighed down by delays in processing of permits.

Shares in 8990 Holdings shed five centavos or 0.79% to P6.30 each on Tuesday. —