Thursday, October 16, 2008 P900M of cash to pay for loan
PROCEEDS of the sale of a 10-hectare lot at the South Road Properties (SRP) will help the Cebu City Government raise funds for loan payments next year.
But aside from the loan payments, city officials want to sell the P900-million property in preparation for any effect the financial crisis will have on the City’s foreign loans, Acting Mayor Michael Rama said.
A down payment of 30 percent or some P300 million will be paid by the winning bidder upon the signing of the contract to sell. The balance will be paid within two years.
Rama confirmed yesterday that it’s Rockwealth Ventures and Development, a joint venture of Pueblo de Oro Development Corp. and a shipping company, that is
interested to buy the property, which they plan to develop into a medical tourism facility.
But in compliance with government procedures, the sale will go through an open competitive bidding where other interested buyers can participate.
The invitation to bid will be published this Saturday.
“We need to have that land converted to cash... We have to be realistic and we have to institute measures to prepare amid the global credit crunch... We need to raise as much money as we can to face our financial obligations, and for other basic services,” Rama told reporters yesterday.
The City pays some P350 million every February and August for its yen loan package for the SRP, initially pegged at P6 billion.
Aside from the 10 hectares that will be put up for sale, City Hall is also preparing to bid out the unsolicited proposal of Filinvest Land Inc. (FLI), which offered to buy 10 hectares of land and develop 40 hectares under a joint venture with the City Government.
It plans to invest some P80 billion for high-rise and medium-rise condominiums, a commercial center, medical and retirement facilities and office buildings.
For the Rockwealth Ventures offer, a high-end hospital facility for tourists, foreigners and expatriates are being eyed.
City Administrator Francisco Fernandez said they are rushing the sale of the 10-hectare portion because of the uncertainties in the global economy.
Although they cannot speculate yet how it will affect the City’s SRP loans with the Japan Bank for International Cooperation (JBIC), the City has to be prepared, he said.
“There’s an international recession and we are uncertain about our economic situation. Whether or not our loans will be affected by it is part of the uncertainties,”
Fernandez explained when asked why the sale will overtake FLI’s proposal.
He said the processes for the sale of the 10-hectare portion will be faster than the bidding procedures for the lots that FLI wants to buy.
A week after the invitation to bid is published, the City will start to accept bidding occupants from interested buyers, Fernandez added. (LCR)
