Filinvest Development Corporation
Business Profile:

FDC was incorporated in the Philippines on April 27, 1973 and has evolved from businesses established by the Gotianun Family since 1955. Originally engaged in the small-scale financing of second-hand cars, the Gotianun Family later expanded into consumer finance in partnership with foreign institutions, such as Chase Manhattan Bank, Westinghouse Electric Corporation and Ford Philippines. By the early 1980s, the Gotianun Family's Filinvest Credit Corporation became one of the leading consumer finance companies in the Philippines in terms of assets. Over time, the "Filinvest" name became established and well-recognized in the Philippines.

In 1967, the Gotianun Family entered the real estate business through the incorporation of Filinvest Realty Corporation, which was engaged in the development of residential subdivisions. In 1984, the Gotianun Family consolidated their real estate interests in FDC after divesting their shares in Family Bank and Trust Company and the Insular Bank of Asia and America. By 1990, FDC expanded its product line to include the construction and sale of low-cost and medium-cost housing units. Thereafter, the product line was further expanded to include the development of commercial district, leisure projects such as farm estates and sports clubs, construction of residential and office condominiums.

At present, in addition to the businesses mentioned above, the Filinvest Group is also involved in mall, theater and resort hotel operations banking and financial services and sugar farming and milling business.

FLI, the subsidiary engaged mainly in the development of residential projects, was incorporated on November 24, 1989 and began its commercial operations in August 1993 after FDC spun off its real estate operations and transferred all related assets and liabilities to FLI in exchange for shares in FLI. FLI was listed on the PSE on October 25, 1993.

FAI was incorporated on August 25, 1993 to serve as the vehicle through which the Group’s joint venture with the Philippine Government to develop the 244-hectare Filinvest Corporate City in Alabang, Muntinlupa City would be implemented. As of the date of this report, FDC directly owns 80% of FAI's issued and outstanding shares and FLI owns the remaining 20%.

In 1994, the Group made a strategic decision to diversify into non-property related businesses. As a result, FDC incorporated EWBC in March 1994. The decision was based on the Group's re-entrance into the financial and banking services industry, an area in which FDC gained previous experience in the 1970s and 1980s.

On June 29, 2007, the Group further diversified its businesses by acquiring 100% of the shares of Pacific Sugar Holding Corporation (PSHC), a company incorporated on June 5, 1989. FDC acquired 100% of PSHC's issued and outstanding shares from ALG Holdings Corporation (ALG) in exchange for 1.55 billion shares of FDC. PSHC owns in full the three Mindanao-based subsidiaries engaged in sugar farming and milling business.

On January 23, 2009, EWBC, American International Group, Inc. (AIG) and certain AIG subsidiaries, including The Philippine American Life and General Insurance Company and AIG Consumer Finance Group, entered into a Share Sale Agreement for EWBC to acquire all of the shares of AIG Philam Savings Bank (AIGPASB), PhilAm Auto Finance and Leasing, Inc. (PAFLI) and PFL Holdings, Inc. (PFLHI).

On March 12, 2009, a Deed of Absolute Sale of Shares was executed between EWBC and each respective Seller. As of this date, EWBC effectively obtained control of AIGPASB, PAFLI and PFLHI, thus, was determined to be the acquisition date.

On March 27, 2009, the Plan of Merger was made and executed among EWBC, AIGPASB, PAFLI and PFLHI. Considering that AIGPASB, PAFLI and PFLHI are wholly owned subsidiaries of EWBC, their respective Board Of Directors and stockholders deemed it necessary and advisable to merge the companies into one.

EWBC remained as the surviving corporation in order that branding leverage and greater efficiency, consolidation and economy in the management and operations of all the companies may be achieved to their and their stockholders’ advantage and welfare.

On March 31, 2009, the companies signed and executed the Articles of Merger which was approved by the BSP and the SEC on August 6, 2009 and September 3, 2009, respectively.

The year 2009 marked the entry of the Group into the hospitality business. Seascapes Resorts, Inc. was incorporated on July 17, 2009 to own Crimson Resort and Spa, a deluxe resort oasis in Mactan, Cebu. The hotel complex is professionally managed and operated by Filarchipelago Hospitality, Inc., a joint venture of FDC and Singapore-registered Archipelago International Pte. Ltd which is well known in the management of hotels, resorts, residences, spas and villas under the Aston, Alana, Quest, Favehotel, Kamuela and Crimson brands. Crimson Resort and Spa was formally launched on October 8, 2010.

Source: Annual Report 2010


Filinvest Development Corporation (FDC), the holding arm of the Gotianun group, registered net income of Php 4.94 billion in 2010, up 79% from previous year. Revenues and other income increased by 37% to Php 21.02 billion. For the first quarter 2011, net income also posted strong growth of 20.3% to hit P 1.1 billion while revenues reached Php 2.5 billion, up by 15.4%, year-on-year, respectively.

Gotianun unit to venture into power generation

GOTIANUN-LED Filinvest Development Corp. plans to develop four liquefied natural gas (LNG) power plants across the country with a total capacity of 1,500 to 1,800 megawatts over the next five years.

The project will be implemented through FDC’s wholly owned subsidiary, FDC Utilities, which expects to invest about $1.8 billion to build the “greenfield” power portfolio. This was based on the estimated cost of building an LNG power plant of $1 million a MW, excluding further investment needed for gas terminals.

“The investment will form the third leg of the FDC conglomerate within the next five years,” FDC president Lourdes Josephine Gotianun-Yap said during the company’s annual stockholders’ meeting Friday. Power is seen eventually accounting for at least 33 percent to as much as 40 percent of FDC’s businesses, thereby complementing its two other core businesses of real estate (Filinvest Land Inc.) and banking (East West Bank).

Apart from the “greenfield” power projects, or those that will be built from scratch, Gotianun-Yap said the conglomerate would be interested to participate in the bidding for state-owned power generation assets to be auctioned by Power Sector Assets and Liabilities Management Corp.

The diversification into the power business will mark FDC’s re-entry into the infrastructure and utilities business after divesting its interest in East Asia Power Resources in the 1990s.
Filinvest to pursue share sale

FILINVEST Development Corp. (FDC) is pursuing a previously postponed share sale to raise funds and meet the minimum public float requirement of the Philippine Stock Exchange (PSE), although it has opted to proceed with the plan gradually.

Following its annual stockholders meeting on Friday, FDC president and chief executive officer Lourdes Yap explained that the fund-raising effort will partly finance the company’s planned venture into power generation as well as capital spending which will be spread out over several years.

She said a gradual approach would also allow FDC to “optimize” its share price.

FDC pushed back the sale of at least 2.5 billion primary shares plus overallotments early this year given unattractive valuations arising from volatile market conditions. UBS AG was tapped to handle the deal.

“We are still targeting a 30-percent [public float]. But that will be done in tranches,” Yap told reporters. “We will more than comply with the PSE rules.”

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EastWest Bank posted first quarter 2011 Net Income of Php443 million, slightly below income for the same period last year by 6.8%.

Results of Operations:

Three-Month Period Ended March 31, 2011
Compared to Three-Month Period Ended March 31, 2010

For the first quarter of 2011, FDC registered total revenues and other income of P4,593.5 million and consolidated net income of P1,145.5 million, a growth of P612.5 million or 15% and P193.1 million or 20%, respectively, from the P3,981.0 million reported revenues and other income and P952.4 million reported net income for the first quarter of 2010.

Source: Q1 2011 Financial Report
The ex-date of the FDC stock dividend of 23.32% might be approaching soon. If you don't wish to avail of the stock dividend and you got FDC on a much higher price at around 5+, sell on its rally if ever once the stock dividend is declared and you want to get out of FDC.

Based on the closing price before the ex-date, the stock will go down to its adjusted price. Next probable rally will be 2nd Quarter Reporting for Income Reporting of FDC (as long as it is greater than 2010 first half when compared) which is on or before August 15, 2011 unless a disclosure is made for the delay on the financial reporting submission.
Filinvest unit plans 200-MW LNG plant

CAGAYAN DE ORO -- The energy unit of Filinvest Development Corp. is planning to put up a 200-megawatt (MW) liquefied natural gas (LNG) power plant at the Phividec Industrial Estate in Misamis Oriental.
Triunfo P. Agustin, chairman of the board of directors of the Phividec Industrial Authority, said negotiations are being finalized for the company’s acquisition of a lot for the project within the 3,000-hectare industrial estate. The project will be undertaken by Strong Field Gas & Electric Corp., a newly formed energy subsidiary of FDC Utilities, Inc.

The $200-million power plant will be part of the $1.8-billion, 1,650-MW energy portfolio announced last May by FDC Utilities. The investment is based on the estimated cost of building an LNG power plant at $1 million per megawatt, excluding further capital expenditures for LNG terminals.

The Phividec Industrial Estate already hosts one locator engaged in energy generation, the 232-MW, coal-fired power plant of Steag State Power, Inc., which supplies close to 20% of Mindanao’s energy demand.

Commissioned in 2007, the plant is expanding its capacity by another 105-MW unit slated for completion by 2013. The coal plant is owned by Germany’s fifth largest power producer, Evonik Steag GmbH of Essen Germany, with local partners Aboitiz Power Corp. and La Filipina Uy Gongco Corp. The $600-million Steag State Power’s expansion will reportedly be undertaken by a new corporation.

There are now at least seven coal-fired power plants in the pipeline in Mindanao with a total planned installed capacity of 1,805 MW costing up to $3.8 billion.

Other proponents include Aboitiz Power Corp., Conal Holdings Corp., San Miguel Corp., Sumitomo Taganito HPAL Nickel Corp. and Sagittarius Mines, Inc. -- Michael D. Baños
The link below is an analysis of East West Bank that is owned by FDC.

A Pacquiao bank
i can feel prosperity is coming soon....
ALG Holdings bought 2,290,000 FDC shares on various dates last June 2011 which led to the increase of their FDC stake to 91.67%.

Source: Statement of changes in beneficial ownership at PSE Site dated July 7, 2011.

Filinvest 300-MW power project gets the green light


THE board of the Philippine Veterans Investment Development Corp. (Phividec) has reportedly approved the application of the consortium led by Filinvest Development Corp. as a locator of its industrial estate in Mindanao, a source told reporters in an interview.

The source who is privy to details of the project said the approval of FiIinvest’s application is still subject to compliance of certain requirements, which the consortium is currently finalizing.

The Phividec Industrial Authority is a government-owned and -controlled corporation. It is mandated by its charter to identify, develop, manage and supervise the 3,000-hectare Phividec Industrial Estate and equip these areas with the necessary infrastructure to encourage the inflow of domestic and foreign investments.

The source added that the FDC Utilities Inc. (FDCUI)—a subsidiary of FDC—is planning to put up a 300-megawatt (MW) power plant inside the Phividec Industrial Estate in Misamis Oriental.

The source said the Filinvest consortium is already in its final discussions with equipment suppliers and contractors and has received commitments from some power off-takers in Mindanao. The source added that the power plant is targeted to start commercial operations in 2014.

The source also noted that the project will be a boost to the Mindanao 2020 Energy Roadmap set by the Mindanao Development Authority (MinDA), chaired by Secretary Luwalhati Antonino.

Energy Secretary Jose Rene Almendras earlier warned of a possible power supply shortages due to precariously low reserve level.

Almendras said the Department of Energy (DOE) is not happy with the reserve levels in Mindanao.

“We’re lucky that the hydroelectric power plants in Mindanao are doing well, and that there are no major breakdowns. The hydroelectric power plants are okay but [the situation] is still not stable,” Almendras said.

He said the DOE is trying to bring in as much capacity in the Mindanao grid. “Hopefully the Iligan power plant comes online in a few months.”

The reserves are very low adding that emergency power supply is are usually only 100 megawatts (MW) during peak hours. Almendras, however, pointed out that no brownouts are being experienced in Mindanao yet. “We’re enticing more as many investors as we can to Mindanao. And there are now more people interested,” he said.

Next year, Almendras warned, will also be challenging, depending on the weather.

“If you’re going to get really hot summers and problems with the hydro levels [which can pose problems], although the Pagasa [Philippine Atmospheric, Geophysical Astronomical Services Administration] made an announcement that we’re entering the La Niña phase again. If this is [true], then the hydropower plants will be okay,” Almendras said.

He added that the department is hopeful new power plants will come online by 2013.

“We’re also revising our estimates because we overestimated this year. We did not hit the peaks that we saw. We may have to revise it, as our estimates were too aggressive, and we have to be conservative, too. For instance, our estimates for peak demand of 7,900 MW did not happen this year,” Almendras said. He also noted that the demand structure is also improving as electricity sales are also going up with call centers and business-process outsourcing industries.

Early this year, the DOE said the Luzon grid will need an additional 300 MW during the summer months to meet the 23.4-percent reserve margin for the projected 7,900-MW demand for this year
Moving slowly going up....

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