CEBU City Hall accepted “in principle” the offer of SM Prime Holdings Inc. to buy a 30-hectare portion of the South Road Properties (SRP) for P2.7 billion, and will ask the company today to pay the P270-million bid bond.

City Administrator Francisco Fernandez said they will also ask SM Prime Holdings president Hans Sy to submit other eligibility documents, including the company’s financial statements.

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A certification that 60 percent of the company’s shares are owned by Filipinos and its Securities and Exchange Commission registration will also be required.

The City’s bids and awards committee is asking for P270 million for the bond to be paid in cash or manager’s check, which represents 10 percent of the bid price.

Fernandez will send the letter to Sy today.

“In principle, we have accepted their offer but the mayor will ask them to submit additional documents and to deposit the 10-percent bid bond. As soon as we have the documents and the bond, two days after, we will already publish the invitation for a competitive challenge,” he said.

14-day period

The invitation will be published twice within a 14-day period. Interested challengers will have 30 days from the last day of publication to submit their offer.

“They will have 30 days to submit their letter of intent and if no one is interested to challenge the offer of SM, we will award the sale to SM,” Fernandez explained.

Through a competitive challenge, the City will be allowed to negotiate with the buyer on the terms and conditions of the sale and the intended use of the property.

Challenge

It will also allow other interested developers to submit their proposals and challenge the offer of SM Prime, which the latter can match if it loses in the bidding.

SM Prime has submitted an unsolicited proposal to buy a 30-hectare portion of the SRP for P2.7 billion, payable in six years with an interest of five percent per year on unpaid principal balance.

The City will get P675 million or 25 percent of total bid price as down payment 15 days after SM Prime receives the Notice of Award.

Mall

Aside from a shopping mall with a floor area of 25 hectares, SM Prime will also build a two-hectare convention facility, hotels, school, hospital and high-rise residential condominiums.

Last Saturday, Mayor Tomas Osmeña briefed barangay captains and councilors on SM’s proposal, and consulted them whether the City should accept it.

All those present raised their hands when he asked them if they approved the offer.

Fernandez said they are still waiting for the formal offer of Bigfoot Properties Inc. to buy a six-hectare portion of the SRP, which will be intended for its expansion project, including a complex of serviced apartments.