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Power distributor eyes P604-M public offering

POWER DISTRIBUTOR Tarlac Electric, Inc. (TEI) aims to raise P603.75 million in a public offering, in order to comply with requirements under its legislative franchise.

In a prospectus filed with the Securities and Exchange Commission (SEC) on Tuesday, TEI said it wants to register four million issued and outstanding common shares, from which it will offer 1.75 million shares at P345 each.

A copy of the prospectus was sent by the SEC to reporters on Thursday.

The company expects to generate net proceeds of P558.47 million from the offering, which will be used to support its expansion plans, refinance maturing loans, and fund general working capital.

The public offering is in line with the company’s franchise, legislated through Republic Act (RA) No. 10795, which requires it to offer to the public 30% of its outstanding capital stock before the fifth year of its operations.

This provision is in accordance with RA No. 9136, or the Electric Power Industry Reform Act, which requires that generation companies and distribution utilities sell at least 15% of their common shares of stock to the public if they are not publicly listed. Newly formed companies must make this offering within the first five years of the issuance of their certificate of compliance.

TEI’s shares will not be listed on the Philippine Stock Exchange.

The company tapped Penta Capital & Investment Corp. as its sole underwriter for the offering.

TEI is a private electric distribution firm that serves residential, commercial and industrial consumers. It had 82,632 customers as of end-2019.

Among its plans for expansion are building a three-story headquarters, constructing network projects, acquiring and installing network equipment, and investing in information technology and communications projects. Disbursements of offer proceeds for these projects are scheduled in 2021. — Denise A. Valdez

Ayala energy arm embarks on $2-B transformation

AYALA-LED AC Energy Philippines, Inc. will need up to $2 billion to exceed its 2025 target 5-gigawatt of installed energy capacity, which will also see the completion of its corporate transformation and restructuring, its top official said on Thursday.

“We estimate that we will be requiring around $1.8 [billion] to $2 billion of equity to help realize that vision,” Eric T. Francia, the company’s president and chief executive officer, said in a virtual media briefing.

“We already have lined up the sources of that capital requirement, that equity requirement, which is close to $2 billion,” he added.

Mr. Francia said AC Energy Philippines — or ACEN to differentiate it from its parent firm AC Energy, Inc. — will become the Ayalas’ integrated platform in the energy sector.

ACEN now houses the group’s local thermal and renewable energy investments ahead of the infusion of projects in Australia, India, and Vietnam and other parts of the region. Its parent, AC Energy, will become AC Energy and Infrastructure Corp. (ACEIC). AC Energy currently owns around 81% of ACEN.

“But that shareholding will move around over the next couple years [because of the] corporate restructuring that’s happening in ACEN,” Mr. Francia said.

Mr. Francia said by the end of next year, AC Energy’s stake would go down to around 65%, with Singapore-based GIC Pte. Ltd. holding 17.5%, and the public owning 18%. The board of ACEN last week approved the proposal of GIC affiliate Arran Investment Pte. Ltd. to invest around P20 billion for a 17.5% ownership stake.

“So basically, we’re five steps away from the completion of the restructuring,” Mr. Francia said.

The five steps will start with a stock rights offering in the first quarter next year, the GIC private placement of 4 billion shares by the end of the second quarter, a follow-on public offering at the stock market soon after, then the infusion of the international energy assets, and finally the sale of the secondary shares from ACEIC to GIC.

“At the end of all that, ACEN would have raised $500 million to $600 million of additional cash for growth capital to add to the $700 million of unappropriated cash or cash reserves to really fuel the 2025 plan,” Mr. Francia said.

The 2025 plan is to exceed 5,000 megawatts, or 5 gigawatts, of attributable capacity and generate at least 50% of energy from renewables. — A. Y. Yang

Housing developer Ovialand sells equity to businessman JJ Atencio

By Denise A. Valdez, Senior Reporter

JANUARIUS Holdings, Inc., the holding company of businessman Januario Jesus Gregorio B. Atencio III, has taken a 13% stake in housing developer Ovialand, Inc. which seeks to expand its business nationwide over the next 10 years.

In a virtual media briefing Thursday, Mr. Atencio announced his agreement with Olivares family-owned Ovialand, which allows him to raise his stake in the company to up to 20% over the next three years. The deal value was not disclosed.

Ovialand seeks to expand its portfolio across the three major islands of Luzon, Visayas and Mindanao until 2030, by which time it targets an annual capacity of 8,000 to 10,000 units from 400 to 600 units at present.

“We’re expecting to open our first regional development in the area of Visayas around 2024-2025, on which we intend to start our township communities as well. We are also intending to venture into four-story mid-rise buildings in more congested areas of Metro Manila. The vision is to bring premier family living in a vertical space. That’s where we intend to go in the next 10 years,” Marie Leonore Fatima O. Vital, president of Ovialand, said.

After Mr. Atencio’s equity investment, Ms. Vital said Ovialand will “seriously consider” doing an initial public offering to support its expansion plans.

The company is expecting to finish 600 houses by the end of the year, and targets to do 1,000 houses by next year. It expects revenues to grow to P4 billion over the next three years to be supported by its 32-hectare land bank.

“Despite the pandemic, we are still looking forward to a 30% growth this year. We were able to deliver to our clients the new houses that we were looking forward to,” Ms. Vital said.

Ovialand’s existing projects are mostly located in Southern Luzon, such as in San Pablo, Laguna and Candelaria, Quezon. These are all horizontal house and lot projects priced between P2.2 million and P2.8 million.

“I think this scale is already sufficient, proof of concept that the business model works and everything that happens from thereon is just a continuation of the basic fundamental structure of the company… (It can do a public offering) any time after COVID,” Mr. Atencio said.

Ovialand is chaired by Giovanni J. Olivares, who has been in the real estate development business since 1991 focusing on socialized and low-cost housing. Ovialand was formed in 2015 to focus on the premier housing market.

Mr. Atencio was the president and chief executive officer of listed mass housing developer 8990 Holdings, Inc., from which he retired in 2017.

Alibaba Cloud targets 5,000 local firms on digital transformation

By Arjay L. Balinbin, Senior Reporter

CHINESE cloud computing company Alibaba Cloud, a subsidiary of Alibaba Group, said Thursday that it is targeting to support 5,000 Philippine enterprises on their digital transformation journey.

“We aim to support at least 5,000 enterprises, train at least 50,000 talents, and certify 10,000 clouders till the end of 2023,” Alibaba Cloud Intelligence Country Head of the Philippines Allen Guo said at an online briefing.

Alibaba Cloud Intelligence President Selina Yuan said the company has trained more than 5,000 local talents.

“The Philippines is a very important market for us, even now that we are just very new  in this market,” she said.

Ms. Yuan also stressed that it is important to support local enterprises with technology solutions during a pandemic crisis to help them continue their businesses.

“In the next three years, Alibaba Cloud will continue to invest another 200 billion yuan to build a data center and support cloud operation systems, servers, chips, internet, and other core projects” in the region, Ms. Yuan added.

In the Philippines, Alibaba Cloud offers retail & e-commerce, fintech, and digital media solutions, Mr. Guo said.

The company also offers data intelligence and artificial intelligence (AI) services such as chatbox and data analytic platforms.

Alibaba Cloud said its technologies also supported this year’s 11.11 Global Shopping Festival, which generated $74.1 billion in gross merchandise value over an 11-day period.

“In the cloud-native era, it is even more pivotal for businesses to be able to take advantage of innovative Database as a Service (DBaaS) offerings to enhance and support high-concurrency and high-volume web applications such as e-commerce, online gaming, and financial technology. Many Fortune 500 firms are already using our Cloud DBaaS for mobile apps, backups and tests, and the most recent impressive performance of our proprietary solutions during the 11.11 Global Shopping Festival is yet another strong endorsement on our capability,” said Li Feifei, president of Database Business, Alibaba Cloud Intelligence.

The company said its real-time computing platform “processed data streams totaling 4 billion items per second during peak time, a considerable surge from 2.5 billion last year.”

“MaxCompute, Alibaba’s proprietary data warehousing platform, handled 1.7 exabytes (an exabyte is equal to 1 billion gigabytes) of data on average per day during the 11-day festival from November 1 to 11, equivalent to processing 230 high-res photos of each of the 7 billion people in the world,” it added.

Drive-in movie launch as Japanese film fest moves online

THE POPULAR Japanese Film Festival (formerly known as Eiga Sai) has shifted to online for this year’s edition, though the opening film will follow in the steps of Cine Europa and be shown at the new SM Cinema by the Bay drive-in theater at the Mall of Asia in Pasay City on Nov. 20 and 22.

“In this time when we can’t go out and visit places, films allow us to take glimpses into new worlds, experience things, see places and gain new perspectives while staying safe in the confines of our homes. Online movies have become the trend because of the pandemic and the Internet as its venue for instant exchange of information and culture,” Ben Suzuki, director of the Japan Foundation Manila, said during a press conference held via Zoom on Nov. 11.

“There’s no better time to harness the power of art than now,” he added.

The festival, called Japanese Film Festival Plus, runs from Nov. 20 to 29 and will feature 28 classic and contemporary Japanese films which will be streamed for free on the festival website (https://watch.jff.jpf.go.jp/).

For those wondering why the change in the festival’s name, the Japan Foundation Manila said that the festival — which has iterations in other Southeast Asian countries, Australia, India, China, and Russia — started rebranding under one unified name: Japanese Film Festival. The Philippines bid goodbye to Eiga Sai in March and welcomed the new festival name. The festival is organized by the Japan Foundation Asian Center in partnership with JT International (Philippines), the Film Development Council of the Philippines, the Embassy of Japan in the Philippines, and SM Cinema.

The opening film is the live action adaptation of well-loved mecha anime Mazinger Z which aired from 1972 to 1974. The 2020 film, Project Dreams — How to Build Mazinger Z’s Hangar by Tsutomu Hanabusa, revolves around a group of office workers who decide that they will build the Mazinger Z and thus begin living in an imaginary anime world as they continue their quest of building the robot. While all of the other films in the festival are free, the opening film has a P100 admission fee which includes popcorn, beef franks, and bottled water.

The film festival slate includes films from several genres, from classic and contemporary Japanese films, anime (Japanese animations), and documentaries. The film selection, according to Mr. Suzuki, was designed to let people enjoy because “in this situation, we have to stay at home, so maybe you have many stresses and a depressed mood already.”

“I think the tendency in selecting films this year is more entertainment-oriented. So please enjoy,” he explained.

Some of the films in the festival are: Our 30-Minute Sessions (2020) by Kentaro Hagiwara, Little Nights, Little Love (2019) by Rikiya Imaizumi, The Great Passage (2013) by Yuya Ishii,

Sumikkogurashi: Good to be in the Corner (2019) by Mankyu, and several animated films by Takeshi Yashiro: Gon, the Little Fox (2015), Moon of a Sleepless Night (2015), Norman the Snowman – The Northern Light (2013), and Norman the Snowman – On a Night of Shooting Stars (2016).

Some of the documentaries in the festival are: Peace (2010) by Kazuhiro Soda, Tora-san in Goto (2016) by Masaru Oura, and Tsukiji Wonderland (2016) by Naotaro Endo.

To reserve tickets for the drive-in screening of Project Dreams — How to Build Mazinger Z’s Hangar,  visit https://www.smtickets.com/events/view/9516. The Japanese Film Festival runs from Nov. 20-29. Each film will be available for 24 hours on the festival website (https://watch.jff.jpf.go.jp/). To view the full schedule of the films, visit http://jff.jpf.go.jp/ or the JFM website (http://www.jfmo.org.ph) or follow their social media accounts. — Zsarlene B. Chua

Swedish retailer Ikea opens 500 Philippine jobs

SWEDISH furnishing retailer Ikea plans to hire nearly 500 employees for its first Philippine store in Pasay City, which it said will be the largest Ikea branch in the world.

Ikea Philippines will run online operations by the second quarter next year, ahead of its physical opening at the Mall of Asia Complex.

Its local operations will include a call center and a warehouse for its ecommerce sales, Ikea Southeast Asia and Mexico said in a press release on Thursday.

The company plans to hire 496 people for a range of jobs, including sales associates, food assistants, and customer service associates, as well as part-time work. New employees will join a local team of 73 people at its Makati office and the project office in Pasay.

Ikea will also transfer 20 Overseas Filipino Workers from stores in other countries to work at the local site. The company plans to continue hiring for local positions until June 2021.

“Part-timers are treated like full-time members of the family, with all the same benefits as full-timers on a prorated basis—including health insurance, annual leave, subsidised meals and Ikea discounts,” Ikea Philippines Market Development Manager and Store Manager Georg Platzer said.

The local store was initially set to open this year, but construction delays postponed the opening to 2021.

The Philippine branch will be the retailer’s 10th store in Southeast Asia. — Jenina P. Ibañez

Quarantine hiatus leads to more personal music for boy band

WHEN American boy band Why Don’t We announced that it was going on a writing hiatus in January, it was meant to be a short hiatus so the members could focus on creating their new album. Then the pandemic hit and the short hiatus turned into nine months, but the good thing about this hiatus, according to a band member, was that they were able to really grow into their art.

“We went into it knowing that we wanted to take a break but we didn’t really think it was going to be that long but it ended up being [a good thing],” Zach Herron, a member of the band, told BusinessWorld in an interview on Nov. 10 via Zoom.

“It gave us a lot more time to perfect the album. A lot of the songs we wrote during quarantine and this craziness — we wouldn’t have any of these songs if quarantine didn’t happen,” he added.

Why Don’t We is a five-member pop boy band that started in 2016. To date they have two albums, including the newest one titled The Good Times and the Bad Ones set to be released in January 2021, and six extended plays. They are known for their songs “8 Letters” and “Trust Fund Baby.”

The members are Mr. Herron, Jack Avery, Corbyn Besson, Jonah Marais, and Daniel Seavey.

To date, the band has had over 3 billion global career streams, and 703 million YouTube views, among other achievements.

The first single off of their new album, titled “Fallin’ (Adrenaline),” was written in July, and Mr. Marais said that their favorite songs off of the 10-track album were written during quarantine.

“Fallin’ (Adrenaline)” enters with heavy drums sampling Kanye West’s “Black Skinhead” from his 2013 album Yeezus, and it just builds up the atmosphere from then on, telling a story of how falling in love feels both dangerous and exciting.

The song’s music video has more than 16 million views on YouTube and over 46 million global streams. It debuted at No. 37 on the Billboard Hot 100, the band’s first Billboard entry. “Fallin’” also proved to be a TikTok sensation, with more than 109 million profiles using the song.

The single has been performed on The Ellen DeGeneres Show and on Jimmy Kimmel Live!

“This album was fully written and produced by us… it’s the first time we’ve really been like, taking our universe into our own hands. It really gave us a lot of confidence. I think it really gave us a lot of respect for each other as well,” Mr. Marais said.

This nine month-long hiatus also led them to grow into their own as “real artists”, according to Mr. Herron. And because they have had a lot of time writing the songs on the album, they made sure that there is a song for everybody.

“There’s a song for everyone here — if you’re going through a breakup, there’s a song for you, and if you’re having fun and [are] in love right now, there’s a song for you, and if you’re having some anxiety right now, there’s a song for you,” Mr. Marais said.

Why Don’t We is taking their music into their own hands and now that they’ve experienced crafting their own sound and songs, Mr. Herron said that they would like to do their succeeding albums the same way, with songs born out of personal experiences. — Zsarlene B. Chua

Banks resilient, have enough buffers vs shocks, says Diokno

BW FILE PHOTO

BANKS CONTINUE to be armed by strong buffers as defense versus the impact of the coronavirus pandemic on their asset quality, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

“The result of our stress tests suggest that banks can continue to lend and prosper through a broad range of adverse scenarios,” Mr. Diokno said in a speech at the General Membership Meeting of the Money Market Association of the Philippines on Wednesday.

The central bank chief said loan quality slightly weakened amid losses and cash flow interruptions experienced by borrowers due to the pandemic.

“We don’t see this trend to extend in the long run, however,” he said.

The banking industry’s non-performing loan ratio stood at 3.4% as of September, the highest in more than seven years or since the 3.42% logged in May 2013, as bad loans surged 60% to P364.672 billion from the P227.6 billion logged a year ago.

The BSP expects banks’ NPL ratio to hit 4.6% by end-2020. In 2002, the industry’s bad loan ratio reached 17.6% in the aftermath of the Asian Financial Crisis.

“We expect the banking industry to book additional provisions as they continue to reassess the quality of the loan portfolio,” Mr. Diokno said.

Allowance for credit losses surged 60% year on year to P334.57 billion at end-September from P209.069 billion as banks sought to guard against defaults.

This higher provisioning has resulted into lower net income for lenders. However, this is likely to be offset by lower operating expenses and the deferment of capital expenditures and non-essential expenses, Mr. Diokno said.

He said they observed that big banks refrained from major changes in their portfolios as they continue to gauge liquidity risks.

“Exposures are mostly concentrated in highly-liquid and investment grade instruments. As a natural consequence, profitability declines,” the central bank chief said.

Meanwhile, Mr. Diokno said they are hopeful banks will continue providing support to micro-, small-, and medium-sized enterprises following regulatory relief measures from the BSP meant to encourage lending to the sector during the pandemic.

The central bank has allowed banks to count their lending to MSMEs as alternate reserve compliance. It has likewise reduced the credit risk weight for loans disbursed to small businesses.

“The banking system’s new MSME loans used for compliance with the reserve requirements have averaged P127.5 billion as of the reserve week of Oct. 22 from P9.3 billion as of April 30,” Mr. Diokno said. — L.W.T. Noble

‘Balik Scientist’ program attracts 28 returnees

THE Department of Science and Technology’s “Balik Scientist” program was supporting 28 returning researchers beneficiaries as of November, according to data made available to BusinessWorld.

Twelve scientists were assigned to the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development; six in the Philippine Council for Health Research and Development; and 10 to the Philippine Council for Industry, Energy and Emerging Technology Research and Development.

All the overseas-based beneficiaries were placed in the program’s three priority areas. The 45-year-old Balik Scientist program has since facilitated the return of 555 scientists.

The program considers overseas-based scientists who are willing to return to the Philippines for engagements of varying durations.

This year, a number of Balik Scientist projects were put on hold due to the lockdown, according to University of the Philippines-Marine Science Institute (MSI) Executive Director Laura T. David.

At an online briefing Tuesday, Ms. David said: “We had difficulty at the start with respect to (the scientists) conducting research in the field because there were restrictions on travel…There were really some research projects that had to be put on hold because of the pandemic,” she said. The MSI is one of the institutions that hosted Balik Scientist participants this year.

When travel restrictions were lifted, the scientists were able to conduct their projects.

Ms. David added that all the Balik Scientist awardees were “very tech-savvy,” which made it easier for them to transfer their lectures online.

Chief Academic Officer and the Dean of the Professional Schools of the University of Mindanao Eugenio S. Guhao, Jr. said his department experienced challenges in communicating with the scientists due to the “slow internet connection” in the area.

Under Republic Act 11035 or the Balik Scientist Act, the program aims to reverse brain drain, strengthen science and technology, and promote the sharing of knowledge, among others. — Angelica Y. Yang

ABS-CBN starts subscription-based streaming service for global viewers

ABS-CBN CORP. launched on Thursday a subscription-based streaming service for its global viewers.

iWantTFC will provide entertainment, news, and information to Filipinos “wherever they are in the world,” ABS-CBN said in an e-mailed statement.

The media company said iWantTFC is available on  iwanttfc.com and on iOS and Android apps.

“It allows users to choose from different subscription options with different levels of access to content and new platform features to suit their needs,” ABS-CBN added.

The platform’s features include offline viewing of select movies and series.

The company said the new platform also offers an “enhanced viewing experience” on bigger screens through select TV brands.

“Premium subscription costs P119 monthly and gives users ad-free access to its entire catalogue and all platform features, while standard subscription can be availed at P59 and allows users to watch ad-supported content. However, monthly subscription prices for iWantTFC users outside of the Philippines vary across territories,” ABS-CBN added.

The media company has reported a net loss of P3.33 billion for the third quarter compared with the attributable net income of P813.03 million it posted in the same period last year.

Its third-quarter revenues dropped 66.9% to P3.72 billion.

ABS-CBN shares on Monday closed 0.35% lower at P11.32 apiece. — Arjay L. Balinbin

Wonder Woman 1984 to hit theaters and HBO Max on Christmas

LOS ANGELES — Superhero movie Wonder Woman 1984 will debut simultaneously in US theaters and on AT&T Inc.’s HBO Max streaming service starting on Christmas Day, an unusual release plan prompted by the coronavirus pandemic.

AT&T’s Warner Bros studio said on Wednesday that the blockbuster film will be shown in theaters outside the United States, where HBO Max is not available, starting on Dec. 16.

“For a movie of this scale, this is unprecedented,” WarnerMedia Chief Executive Jason Kilar said in a blog post explaining why the company decided to provide the movie in homes and theaters at the same time.

Movies typically play exclusively in cinemas for roughly 75 days before they become available elsewhere.

An action spectacle starring Gal Gadot, Wonder Woman 1984 had originally been scheduled to reach cinemas in June 2020.

But Hollywood studios delayed most of their summer blockbusters until 2021 as the virus has kept many theaters in key markets closed, devastating theater operators including AMC Entertainment and Cineworld Group Plc.

Wonder Woman 1984 was moved several times and is the last big-budget action film on the 2020 schedule.

Director Patty Jenkins, who had pushed for a theatrical release, supported the plan.

“At some point you have to choose to share any love and joy you have to give, over everything else,” Jenkins wrote on Twitter. “We truly hope that our film brings a little bit of joy and reprieve to all of you this holiday season.”

Gadot said the move “wasn’t an easy decision.”

“We never thought we’d have to hold onto the release for such a long time,” she tweeted, “but COVID rocked all of our worlds.”

Kilar said he believed the strategy would benefit fans, theater operators, and the company, “in the form of fan response both theatrically and via HBO Max in the US.”

The company is trying to attract new subscribers to HBO Max, a $15-per-month subscription launched in May to compete with Netflix Inc.

It is unclear how many people will head to theaters during the coronavirus disease 2019 (COVID-19) pandemic when they can watch Wonder Woman 1984 in their living rooms. Theaters in Los Angeles and New York, the biggest US moviegoing markets, remain closed. Cinemas open in other areas have limited ticket sales and taken other steps to prevent transmission of the virus.

Wonder Woman 1984 is a sequel to 2017 hit Wonder Woman, which collected $821.8 million in global ticket sales. — Reuters

TCC eyes majority stake in BPICTL

TOKYO CENTURY Corp. (TCC) is taking majority ownership of Bank of the Philippine Islands’ (BPI) leasing firm, which is a joint venture with the foreign firm.

BPI said in a disclosure to the local bourse on Wednesday that TCC’s board of directors on Nov. 9 decided to increase its stake in BPI Century Tokyo Lease & Finance Corp. (BPICTL) to 51% from 49% previously, effectively taking a majority interest in the joint venture.

BPI’s own board of directors on Nov. 18 approved the acceptance of TCC’s offer.

The bank said the transaction is expected to close before the year ends and is subject to the requisite approvals and documentation.

“With TCC as majority shareholder, this allows the joint venture to optimize the value of TCC’s expertise in the full service operating lease industry while capitalizing on BPI’s customer base,” the Ayala-led bank said.

BPI in 2014 entered into a joint venture with TCC for a leasing and financing firm that offers direct leasing, sale of equipment and leaseback, among others.

“This strategic partnership allowed BPI to innovate in asset financing products and enhance the service experience of an expanding base of Philippine consumers and corporations seeking asset leasing and rental solutions,” the local lender said.

BPI’s net income dropped 33.7% to P5.5 billion in the third quarter due to higher loan loss provisions amid the coronavirus pandemic.

This brought BPI’s net profit for the first nine months of the year to P17.17 billion, down 22.1% from the P22.03 billion booked in the comparable year-ago period.

BPI shares closed at P86.70 apiece on Thursday, rising by P2.25 or 2.66% from its previous finish.

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