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Thursday, March 01, 2007
SM wants takeover of city's P6.3B SRP debt
By Gingging A. Campaña
CEBU CITY -- Top executives of SM Prime Holdings Inc. submitted Wednesday their financial proposal to the marketing arm of the South Road Properties (SRP) on their plan to take full control over the entire 295-hectare facility.
Among other things, SM's multi-billion-peso offer includes "taking over the full obligation of paying" for the balance of Cebu City Hall's P6.3-billion loan with the Japan Bank for International Cooperation (JBIC), said Joel Mari Yu, managing director of the Cebu Investment Promotions Center (CIPC).
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If the agreement pushes through, City Hall need not wait for 20 years to settle the 12.292 billion yen it borrowed from JBIC to build the SRP.
"Wa na tay utang kon mahinayon na (That deal will wipe out our debt)," Yu told Sun.Star Cebu Wednesday.
Yu, who met with top executives of SM Wednesday morning at the CIPC office in the Waterfront Cebu City Hotel, was on his way to the office of Mayor Tomas Osmeña to report what transpired when Sun.Star called up.
Yu said that the mayor opted not to be at the meeting as he tasked CIPC to take up technical matters with prospective SRP investors.
"I am just the technical guy. My job is to evaluate and make recommendations to the mayor. It will be the mayor and the City Council that will decide on the proposals. I will report to him what we have discussed and we will discuss our counter-conditions to SM's proposal. I'm trying to get this moving as fast as possible," Yu said.
Yu begged off from revealing the details of the offer, as it will be the mayor who will discuss it in public.
He hinted, though, that SM initially offered to enter into a joint venture with the City Government, like the one between the Cebu Provincial Government and the Cebu Property Ventures and Development Corp. (CPVDC).
CPVDC, a subsidiary of Ayala Land Holdings Inc., developed a Province-owned lot into the information technology park now known as the Asia Town IT Park in Barangay Apas, Cebu City.
Yu said that with SM's plan to develop the entire SRP, the company will have to ask the City Government to abort negotiations with Bigfoot Global Solutions, Inc., who plans to buy the 16-hectare Pond F of the SRP.
Pond F is the 1.4-kilometer beachfront of the SRP, which Bigfoot wants to develop into a yacht club.
SM, however, reportedly told Yu that they will honor the City's existing lease agreement with Bigfoot on a two-hectare portion of the SRP, which is now being developed into a studio and soundstage.
Bigfoot will occupy the two-hectare site in the next 25 years at a lease of P5 million a year.
It already paid the City Government over half a million dollars as a five-year advance.
"But since SM wants to buy the SRP altogether, ilang gusto nga apil pod ang Pond F. Lisod man kung wala ang kinanin-dotan nga lugar (They're also interested in Pond F. They can hardly ignore the best part of the property)," he said. (Sun.Star Cebu)
For more Philippine news, visit Sun.Star Dumaguete. (March 1, 2007 issue)
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