Besides P18.8 B IPO, P2.8 B upside may go straight to Wenceslao
Construction magnate Delfin Wenceslao Jr. could win a P2.8-billion bonus for himself should there be strong demand for the shares of his construction and property development company ahead of the Dec. 8 listing.
Should there be overbooking for the initial public offering of DM Wenceslao and Associates Inc., its parent company, Wendel Holdings Co. Inc., has agreed to make available to institutional investors an additional three percent block of shares, worth P2.8 billion, as over-allotment option.
After deducting fees and expenses, “the selling shareholder shall receive net proceeds of approximately P2.6 billion from the sale of optional shares... while our company will not receive any of such proceeds,” said DM Wenceslao and Associates Inc. (trading symbol: DMW) in the prospectus for its P18.88-billion offering. Translation: Merry Christmas, Ding! The 72-year-old Wenceslao himself owns 99.6 percent of Wendel Holdings, with the balance held by his wife and four sons.
The youngest of the four, Delfin Angelo, 36 and armed with a master’s degree in real estate development from Massachusetts Institute of Technology, is actually DMW’s chief executive.
For those who believe in the Asian-Judeo-Christian tradition of primogeniture, the eldest son, Carlos Delfin, 43, happens to be a licensed elementary school teacher.
After the IPO, Wendel’s ownership of DMW would end up anywhere from 59.9 percent (after full exercise of over-allotment option) to 62.9 percent. Wenceslao, in his personal capacity, will own another 17 percent block.
The capital-raising exercise also deepens the alliance between DMW and Ayala Land, the anchor tenant in the reclaimed 58-hectare Aseana City, DMW’s crown jewel in its 50-year journey to billionarehood.
Ayala has leased a nine-hectare plot adjoining the City of Dreams casino-resort for 45 years. There the country’s premiere developer plans to build a hotel, most likely Seda, and another mall half the size of taipan Henry Sy’s Mall of Asia.
The cash-flush Qatari embassy has also purchased a 6,132sqm property for its future office-and-residence by the sea.
Even without anything built there yet since Ayala leased the land in September 2014, the Zobels have already been contributing 85 percent of the DMW land rentals, which for the first semester of 2015 alone had totaled almost P400 million.
DMW also farmed out to BPI Capital the domestic co-lead management and global bookrunning for the IPO, in addition to appointing retired BPI Bank president Aurelio Montinola III to the board.
And, like Ayala, DMW will also venture into the residential condo market, with its first project to be launched next year targeting the mid-market segment with 35-to 85-square-meter apartments.
And still taking a leaf from Ayala, as developer and master planner with zoning oversight over Aseana City, “we have also capitalized on our master developer role to pursue captive business opportunities such as the provision of water, electricity, gas and city security services,” DMW said.
While it has not declared any dividends since 2012, DMW has committed starting this year to an annual cash dividend payout ratio of 30 percent.
On land values alone, DMW is already a five-fold winner, thanks to the massive development along the adjoining Mall of Asia-Pagcor City corridor, the coming LRT-NAIA expressway connection and, don’t forget, the penchant of the natives to multiply like rabbits in land-short Philippines.
According to Colliers, the price of reclaimed property in Aseana City has shot from P31,500/sqm to P150,000 in just the past decade.
Money talks
• Not even the presence of former Finance Secretary Juanita Amatong and PNB chairman Flor Tarriela on the board of Tulay sa Pag-unlad could protect the charitable NGO from the debt-ly embrace of Kim Jacinto-Henares.
The NGO lost in its fight against the Bureau of Internal Revenue over P77 million in deficient value-added and documentary stamp taxes covering its 2008-era micro-lending transactions.
• Defer any shopping expedition to the Mall of Asia this long APEC-induced holidays, but most especially Wednesday, when the immediate neighborhood will be locked down as President Aquino hosts an elaborate dinner for the visiting heads of states at the MOA Arena.
• Malacañang is preparing for P.Noy’s exit in June by building a presidential archives on Aguado St., right across the Palace, where Imelda Marcos’ younger brother, Ambassador Benjamin “Kokoy” Romualdez, used to operate the de-facto Department of Foreign Affairs during the Marcos regime.
Heard through the grapevine
Ayala Land has started demolition works on the former Mandarin Oriental hotel, following the developer’s having successfully lobbied the National Commission for Culture and the Arts to declare the four-decade building “not a faithful articulation” of the signature style of the late architect, National Artist Leandro Locsin.
Despite being the first overseas Mandarin Oriental branch, the hotel has unfortunately also been “one of the least performing investments of the Ayala Group,” Ayala itself told the NCCA.
E-mail: cocktales_tv5@yahoo.com