DAVAO CITY — Local property developer FTC Group of Companies Corp. is facing a one-year delay in the turnover of units for its 33-floor mixed-use Aeon Towers, but it is embarking on another project, this time a complex of five residential buildings.

FTC held the topping-off ceremony for Aeon Towers in late February 2017. At that time, FTC Group Chairman Francisco T. Cruz said the P3.1-billion building was 70% complete and they were aiming to hand over the residential units to buyers by end-2017 or January 2018.

Last week, however, Ian Y. Cruz, president of FTC subsidiary Aeon Luxe Properties, Inc., said the turnover of the condominium units is set for December 2018.

“Aeon is just a developer and part owner of the hotel, and Aeon Towers will be operated by a third party, Vanguard (Hotels). We launched Aeon Towers in 2011 and now we are running to 2018. The reason for the delay is we have to ensure the safety of our property… (Another) one of the causes of the delay is we have changed so many designs from the original one. Because we have to adapt to the trend now,” Mr. Cruz said in an interview with the media.

Mr. Cruz said the total project cost has reached P4.5 billion, including the hotel fixtures and furniture.

Aeon Towers — a mixed condominium, commercial and hotel project — would become the tallest operational building in Davao City and the rest of Mindanao once opened.

In February 2015, a 100-meter section of the road that borders the site collapsed, the second time after a similar incident took place at the same portion in September 2014. The second incident prompted the Department of Labor and Employment to issue a temporary stoppage order due to worker safety concerns.

In October last year, the project figured in another controversy when Davao City Mayor Sara Duterte-Carpio issued an ultimatum against the company for not immediately removing a crane on its rooftop, which the Civil Aviation Authority of the Philippines said exceeded the allowable height and was posing an obstruction and risks to flights coming into the Davao International Airport.

NEW PROJECT
Meanwhile, Aeon Luxe Properties will be developing Aeon Bleu, a five-building condominium complex on a 1.6-hectare property in the Bacaca area.

“Aeon Bleu, which is a mid-cost development, is going to be the first inland residential condotel resort living in the city,” said Andrew P. Bautista, Aeon Luxe Properties vice-president for sales.

Mr. Bautista said the company is targeting to launch the project within the second quarter this year.

“We are prepared to launch it anytime, as soon as we get our permits that are expected in less than a month now. We are now in the process of doing it at HLURB (Housing and Land Use Regulatory Board) and the (city) council,” he said.

The tallest of the five buildings would be 26 floors, he added. — Maya M. Padillo

GLOBE Telecom, Inc. on Sunday said it has deployed close to 1,700 long-term evolution (LTE) sites using the 700 megahertz (MHz) nationwide.

“Aggressive deployment of LTE 700 sites has led to improvement in the country’s mobile speeds,” the telecommunications giant said in a statement.

The 700 MHz frequency and 2600 MHz band were among San Miguel Corp.’s telecommunications assets which were jointly acquired by Globe and PLDT, Inc. in 2016.

Globe said it also rolled out close to 2,000 sites on the 2600 MHz and 1800 MHz bands, with majority of the company’s LTE 700, LTE 2600 and L1800 sites deployed mainly in Metro Manila, Metro Cebu and Metro Davao where a high number of customers are using LTE-capable devices. Users with LTE-capable devices experience better LTE connectivity.

Using the 2600 MHz, Globe also fired up around 170 massive multiple input multiple output (MIMO) sites. It said the massive MIMO technology enables a mobile network to multiply the capacity of a wireless connection without requiring more antennas.

“The technology thus increases wireless throughput, accommodating more users at higher data rates with better reliability while consuming less power,” Globe said, adding that massive MIMO is also the fundamental radio access technology for fifth generation (5G).

The company recently said it has deployed one million broadband lines, halfway through its goal of two million lines by 2020.

The telco’s net profit fell 5% to P15.08 billion in 2017 despite record revenues, given increased investments in data network.

It may keep its $850-million capital expenditure (capex) for the next two years.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo

SHANGHAI — Beijing’s unprecedented takeover of private insurer Anbang confirms that toxic risks lurk in the world’s second-largest economy while signalling the state’s tightening grip on China Inc. despite reform rhetoric, analysts said.

Government regulators seized control of the Anbang Insurance Group on Friday, saying its debt-fueled foreign acquisition binge left the company in financial peril and that high-flying founder and former chairman Wu Xiaohui would be prosecuted for fraud.

The takeover, to last at least a year, was the most striking step yet by regulators to rein in dizzying debt levels and a clear sign that the government saw something frightening in Anbang’s books.

“This move has huge significance. If something went wrong with Anbang it would lead to massive bad loans in the financial system,” said Beijing-based economist Hu Xingdou.

China has moved aggressively over the past year to slam the brakes on companies like Anbang, which ran up gargantuan debts to fund pricey overseas acquisitions.

Such companies have become known as “gray rhinos” — financial beasts that could charge quickly, with damaging results.

Despite expert warnings that China’s spiralling debt could spark a meltdown with global repercussions, the communist regime has steadfastly insisted that any risks remain controllable.

‘SERIOUS PROBLEM’
But a look under Anbang’s hood has clearly spooked Beijing, analysts say.

Anbang raked in cash largely by selling short-term policies promising some of the highest returns in the market, and rose from obscurity to quickly become one of China’s biggest insurers.

With the proceeds, the Beijing-based firm spent billions overseas, snapping up New York’s iconic Waldorf Astoria hotel in 2015 for nearly $2 billion, adding other pricey hotel and financial assets around the globe, and even making an aborted $15-billion bid for Starwood Hotels.

But Beijing’s clampdown on risky financial practices since 2016 crippled Anbang’s fund-raising.

“It’s a serious problem. There may now be a flood of redemptions coming through,” said Christopher Balding, a Peking University economics professor.

“If you are a $315-billion company like Anbang and have to write down even just 20% of your assets, that’s almost a $100-billion hole. That’s big even by China’s standards.”

Many Anbang holdings look likely to be sold off.

Attention will now shift to other acquisitive “gray rhinos” like HNA, Fosun and the Wanda Group.

Those companies have already been pulling back, with Wanda in particular selling off billions in assets recently to stay solvent, and are not yet seen as imminent government takeover targets.

GROWING STATE CONTROL
But the Anbang move sets a precedent of state intervention in the private sector that is expected to recur. President Xi Jinping has become the most powerful Chinese leader in decades by pushing a program of party control in all walks of life.

Fraser Howie, co-author of a book on China’s financial system, said Anbang’s takeover is a fresh example. In an essay, he wrote that government promises of economic reform to let market forces lead “really have no weight anymore.”

“While further regulatory takeovers may be unlikely, government-orchestrated bailouts and restructurings are almost certain to come,” Howie said.

“Xi’s China seems to care less and less about the distinction between the private and state sectors.” China’s debt crackdown is generally lauded as necessary to avert a credit crisis, but growing state control worries economists too.

It curbs the natural and healthy distribution of capital, and prevents an efficient modern economy from developing, said Julian Evans-Pritchard, China economist with Capital Economics. “China won’t be able to achieve the growth rates that it could with better resource allocation,” Evans-Pritchard said.

“State control gives the appearance of stability, but growth continues to slide and in a decade you’re at three percent growth.”

China’s GDP grew 6.9% in 2017, robust but well down from double-digit growth a decade ago.

BLAMING BEIJING
Anbang’s takeover also means that the Communist Party is now the ultimate owner of the Waldorf Astoria and other Anbang assets, and the specter of such state involvement could deter foreign regulators from approving some future Chinese investments overseas, analysts add.

With its vast war chest, China’s all-powerful government is expected to contain financial risks. But the current mess is Beijing’s own fault, said Balding, the Peking University professor.

Xi’s government and state media extolled the then-accelerating wave of overseas acquisitions just a few years ago, apparently oblivious of the risks. Chinese regulatory approval is necessary for major overseas acquisitions by the country’s firms, meaning regulators allowed many now considered questionable, he added.

“You have to lay the blame at Beijing’s feet,” Balding said. “Companies like Anbang clearly got drunk and got behind the wheel, but Beijing was plying them with beer and giving them the keys.” — AFP