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Property developer could be 1st to go public this year

By Arra B. Francia
Senior Reporter

PROPERTY developer Kepwealth Property Philippines, Inc. (KPPI) could be the first company to go public this year, after it bagged final approval to raise up to P384.77 million at the stock exchange.

In a notice on its Web site on Thursday, the Philippine Stock Exchange, Inc. (PSE) said it has approved KPPI’s plan to issue up to 67.032 million common shares priced up to P5.74 each in its initial public offering (IPO).

“It may have taken some time before we had our first IPO but I am pleased that KPPI is embarking on its maiden share sale,” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement. “I hope that this move will encourage other companies that pushed back their IPOs to revisit their plans and consider the stock market as an avenue for capital raising.”

The PSE’s approval comes after the Securities and Exchange Commission (SEC) en banc also cleared the company’s application during its meeting last Tuesday, July 23.

KPPI will set the final offer price on Aug. 1, with the offer period scheduled to run from Aug. 5 to 9. The shares will then be listed on Aug. 19 under the ticker “KPPI” on PSE’s small, medium and emerging board.

The company will have a public float of 33.34% upon listing and market capitalization of P1.154 billion.

KPPI expects P363 million in net proceeds from the offer which will be used for acquisition of about 3,500 square meters (sq.m.) of leasable office space. The company will have about 18,121 sq.m. of leasable space after the acquisition.

Office spaces to be acquired are located in Quezon City, Pasig City and Makati City worth P245 million from the first to second quarter of 2020. Office spaces in Davao worth P120 million will also be acquired in 2020’s second quarter. “The company believes these properties will reduce the concentration risk of its current operations in Cebu City and will create additional recurring revenue streams once these assets are leased out to tenants,” KPPI said.

KPPI tapped BDO Capital and Investment Corp. as the transaction’s sole issue manager, underwriter and sole bookrunner.

Incorporated in 2005, KPPI is involved in development and management of office, commercial, agricultural and residential properties, including hotels, inns, resorts and apartments.

The company currently owns 77 office condominiums with 98 leasable spaces in Kepwealth Center, a commercial building in Cebu Business Park, Cebu City.

It also manages commercial, office and residential units in several buildings in Metro Manila, including six units in Oxford Suites, 79 units in Medical Plaza Ortigas, and 91 units in Burgundy Corporate Center.

It also has 59 units in Burgundy West Bay Tower, 43 units in Atrium Mall, 98 units in Icon Macapagal, and 29 units in Vivaldi Residences-Cubao Commercial Space.

Sought for comment on the company’s prospects, Regina Capital Development Corp. President Marita A. Limlingan highlighted the location of most of its properties.

“Kepwealth Property is a player in the office industry in Metro Cebu — which, according to third party property consultants, is currently experiencing record surges in demand from the POGO and BPO industry,” Ms. Limlingan said in a text message, referring to Philippine offshore gaming operators and business process outsourcing.

“All developers based around that area, including Kepwealth, are expected to benefit from the strong performance of the sector overall.”

KPPI may be the first company to go public this year, amid a number of applications that are also lined up at the SEC. Other companies that have intend to conduct an IPO this year are coconut product manufacturer Axelum Resources Corp. (P7.7 billion) and Villar-led All Home Corp. (P20.7 billion).

China, Malaysia restart massive ‘Belt and Road’ project after hiccups

DUNGUN, MALAYSIA — China and Malaysia resumed construction on a massive “Belt and Road” train project in northern Malaysia on Thursday, after a year-long suspension and following a rare agreement to cut its cost by nearly a third to about $11 billion.

The project was initially canceled by Malaysian Prime Minister Mahathir Mohamad, who came to power after a shock election victory in May last year, as he followed through a pledge to renegotiate or cancel “unfair” Chinese mega-projects approved by his predecessor, Najib Razak.

But in April, the close trade partners agreed to proceed with the East Coast Rail Link (ECRL) at a cost of 44 billion ringgit ($10.7 billion), reducing it from 65.5 billion ringgit.

The 640 kilometer line (398 miles), with China Communications Construction Company Ltd. as the lead contractor, will connect Port Klang on the Straits of Malacca with the city of Kota Bharu in northeast peninsular Malaysia.

The agreement to resume work on the project had immediately boosted confidence in Malaysia among foreign investors, China’s ambassador to Malaysia said at a ceremony in the coastal district of Dungun.

Flanked by cranes and trucks parked near a partly completed section of a tunnel, Ambassador Bai Tian spoke of “a great wave” of potential Chinese investors coming to Malaysia for field studies, and he expected many of them to decide to invest.

China is debt-heavy Malaysia’s biggest trade partner and the countries have close cultural ties too.

Ambassador Bai said the completion of the ECRL, expected by December 2026, could more than double the number of Chinese tourists coming in to Malaysia from 3 million last year.

Malaysia Rail Link, the project’s local partner, said in a statement that up to 70% of the workers will be local and that domestic contractors will get 40% of the civil works.

The Belt and Road Initiative (BRI) has been praised for its potential to speed up economic development in many developing countries but criticised for potentially saddling many of them with unsustainable debt.

Malaysia’s Finance Minister Lim Guan Eng told Reuters on Monday that Beijing had offered them more BRI infrastructure investments and that Kuala Lumpur would consider them “if the pricing is right.”

Malaysia is already identifying new joint investment opportunities with China along the ECRL corridor, Malaysian Transport Minister Anthony Loke said at the Dungun event. — Reuters

Game of Thrones prequel in the works

BEVERLY HILLS — The first episode of a possible prequel series to HBO’s global hit Game of Thrones has completed filming in Belfast, a network executive said on Wednesday.

HBO executives will review the episode before deciding whether to make a full season but Casey Bloys, president of programming at the network owned by AT&T Inc, appeared upbeat about what he had seen so far.

“It looks really good. The cast was amazing,” Bloys said in response to questions at a Television Critics Association event where networks preview upcoming shows.

With Game of Thrones concluding its eight-season run in May, many fans are eager to return to the fictional world of Westeros created by author George R.R. Martin.

The series was a cornerstone of HBO’s primetime offerings, but its final season was divisive, with both fans and critics finding specific plot twists, particularly the handling of one primary character, troubling. Nearly 1.7 million people signed an online petition calling for a rewrite of the final season.

Despite the uproar, Game of Thrones led this year’s Emmy contenders with 32 nominations.

Bloys said the backlash did not change the network’s approach to the prequel, which stars Naomi Watts and is set thousands of years before the events of Game of Thrones.

The petition showed “a lot of enthusiasm and passion for the show,” Bloys said, but “wasn’t something we seriously considered.”

“There are very, very few downsides to having a hugely popular show,” Bloys said. “One I can think of is when you try to end it, many people have opinions on how it should end… I think it just comes with the territory.” — Reuters

From China with love

By Cecille Santillan-Visto

Fan Meeting
Dylan Wang Fun Meet
July 20
Araneta Coliseum

IF THERE is one export from China that the Philippines is willing to receive with open arms, it’s celebrities. More specifically, Dylan Wang.

The 20-year-old Chinese star, who headlined the 2018 revival of the TV series, Meteor Garden, sparked a frenzy when he held his first ever fan meeting at the Araneta Coliseum in Quezon City over the weekend. The event was part of his promotional blitz as one of the newest image models of the fashion and lifestyle brand, Bench.

In a press conference held shortly before the fan gathering at the Big Dome, Mr. Wang — who played Dao Ming Si in Meteor Garden that is loosely based on Japanese manga, Boys Over Flowers — said he was astonished to learn that he has a huge following in the Philippines.

“I didn’t expect it. When I checked online (through Weibo), only then did I learn that I have a fanbase here,” he said.

“Just like the weather, Filipinos are very warm… I am very happy to be a Bench ambassador,” he added, noting that it was his first visit the country.

Some of the biggest local celebrities already model for the homegrown clothing line but from time to time, Bench also appoints international brand representatives, tagged as “Global Benchsetters.”

The actor-singer-model joins a stable of foreign stars endorsing Bench which includes Liam Hemsworth, Taylor Lautner, and Lee Min Ho, Park Hyungsik, and Park Seo Joon of Korea.

For Bench, the appointment of Mr. Wang as an endorser is considered something of a milestone as Jerry Yan of F4, the original Dao Ming Si, also promoted Bench in 2003.

Although very sporty and appearing to prefer hip-hop fashion, the former flight attendant, who at one time was the representative of all stewards and stewardesses in China, said fashion should not compromise comfort.

“Just wear whatever you want, whatever makes you happy. But personally, I prefer comfortable and loose clothing,” said Mr. Wang, who wore a simple white shirt, black jeans, a red and blue jacket, and rubber shoes.

At the fan meeting, the basketball enthusiast donned a white T-shirt with the words “I love Manila” written in both Chinese and English, jeans, and white high-cuts with red and yellow embellishments.

The “fun meet” itself last little over an hour, including a 30-minute question-and-answer portion and the 15 minutes allocated for an autograph session with 100 lucky fans who qualified after spending at least P20,000 on Bench merchandise.

Ten audience members won onstage passes and the opportunity to play a game with Mr. Wang. They were made to spin a roulette wheel and win the corresponding prize: bouquet of flowers, a selfie with the actor, a mobile phone voice recording, or a signed poster.

A fan who was first to call a designated mobile number was also allowed to ask the actor a question. Special gifts were likewise given to spectators who managed to catch huge balloons during the “zygote game.”

The event also gave thousands of supporters the opportunity to get to know Mr. Wang better. A product of a talent search, Super Idol, and a castmember of The Inn 2, a reality show similar to Big Brother, he said these two programs helped mold him as an entertainer.

For Meteor Garden, considering that it was a remake, he admitted that he was conscious not mirror the portrayal of Mr. Yan.

“I added my own style and flavor to the role of Dao Ming Si. I did my best not to copy (the Jerry Yan version) and interpreted the role as I saw appropriate,” he said.

He acknowledged that he has similarities with his TV character in some aspects, particularly the immaturity and playfulness. While he misses his stint in the airline industry a bit, he said that “doing different things and meeting a lot of people,” which are the best parts of being an actor, compensate.

Although he has no specific dream roles, if given the choice, he wants to play more offbeat parts. He also wants to try various genres from drama to fantasy-action, to complement his love story/romantic comedy experience. He requested the audience wait for his next major project, The National Southwest Associated University and Us, which revolves around the trials and tribulations of students during the Japanese and Chinese War. The TV drama will be released in October.

When not busy with projects, he continues to enjoy playing games and traveling with friends.

Though very young and still establishing his credentials as an actor, Mr. Wang has already caught the fancy of Asian drama addicts the worldwide. Fueled by the emerging “fan economy” in the Philippines, it is safe to say that Bench’s bet on Mr. Wang was well worth the investment.

MPIC unit extends tender offer for MDI shares

METRO PACIFIC Hospital Holdings, Inc. (MPHHI) has extended its offer to buy P2.261 billion worth of shares in Medical Doctors, Inc. (MDI), in a bid to give shareholders time to think the deal through.

In a notice published in a newspaper Thursday, MPHHI said it has extended the tender offer to Aug. 9 from the original July 26 deadline. It has secured approval from the Securities and Exchange Commission for the extension.

“The offer period is extended to give MDI shareholders more time to consider the offer and clarify some terms, and prepare the necessary documentary requirements,” MPHHI said in the notice.

The company said a total of 17,636 shares have been tendered as of July 24, way below its target of acquiring up to 563,000 outstanding common shares in the operator of Makati Medical Center.

The shares represent about 16.6% of the total outstanding shares of MDI, which if fully tendered will bring MPHHI’s ownership in the hospital to no more than 49.9%. MPHHI currently holds a 33.3% stake in the company.

With the extension of the deadline, MPHHI will also push back the settlement date to within 10 business days after the termination of the tender offer, or depending on when it gets approval from the Philippine Competition Commission.

MPHHI will pay 75% of the total purchase price for the MDI shares on the settlement date, while the balance will be paid within five calendar days from the delivery to the offeror of the original and valid certificates authorizing registration from the relevant revenue district office of the Bureau of Internal Revenue authorizing the transfer of shares.

MPHHI is the hospital unit of conglomerate Metro Pacific Holdings, Inc., which also has core interests in power, water, infrastructure, and logistics.

The company last May shelved its plan to conduct an initial public offering, contrary to its earlier plans to raise about P15 billion to finance its expansion.

MPIC then said it will divest some of its shareholdings in MPHHI, which is seen to be valued at about $2 billion.

Shares in MPIC went up by a centavo or 0.21% to close at P4.80 each at the stock exchange on Thursday.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arra B. Francia

Singing at the LRT

MORE THAN 70 musical performances, ranging from busking to full-on gigs — at various locations including LRT stations are what this year’s Linggo ng Musikang Pilipino (Philippine Music Week) is featuring until the end of July.

The annual event has been held on the last week of July since 2015 and is organized by the Organisasyon ng Pilipinong Mang-aawit (OPM) and the National Commission for Culture and the Arts (NCCA). The weeklong festival aims to “promote the awareness and appreciation of all forms of Filipino music” through a variety of on-site and online performances in a number of cities including Baguio and Davao City, according to a press release.

The event was created after President Rodrigo R. Duterte signed Presidential Proclamation 933 which declared the last week of July as Philippine Music Week.

Touted as “what may possibly be its biggest and most diverse festival lineup yet,” the festival events include the seventh restaging of Rak of Aegis on July 27 and 28 at the PETA Theater in Quezon City.

“[Linggo] has always shown consistency in terms of championing top-notch Filipino music,” Herminio Jose “Ogie” Alcasid Jr., president of OPM, was quoted as saying in the release.

A themed musical showcase from 1990s icons such as Barbie Almalbis, Wency Cornejo, Dong Abay, and Cooky Chua is set on July 31 at Historia Boutique Bar and Restaurant in Quezon City.

Ms. Chua will also perform on July 28 with the Manila String Machine at the Power Plant mall in Makati City. Laira Maigue, Noel Cabangon, and Aikee will perform at Lucky Chinatown mall in Manila on the same day.

Other themed showcases are scheduled within the week in bars across Metro Manila.

The festival is also bringing live music to LRT stations, events called “Railway Jams.” The remaining performances will be on July 26 at the Doroteo station (with performances by Maxine Marie, Ace Dyamante, Kian Dionisio, and Miss Ramonne) and July 27 at the Monumento station (Vanessa Mendoza, Calde, Vanz Bonaobra, and Jai Barrientos). Performances are at 4 p.m.

Busking sessions are scheduled until Sept. 20 at the PETA Theater Center in Quezon City.

There will also be performances in provinces including in Ayala Malls Legazpi, Albay on July 28 which will feature bands like Upbeat Ska and Green Leafy Vegetable.

“The celebration is an assertion to inject in the consciousness of the Filipinos that we have our own treasure trove, local and regional, written in national and local languages, of songs that reflect our culture,” Noel Cabangon, OPM board member was quoted as saying in the release.

“We Filipinos should have the consciousness to support it. We are on our 5th year since the Presidential Proclamation 933 was signed in 2014. It is very young. And it is a struggle. But it is very important that we have this mandate from the government. At least now we’re gaining grounds. Hopefully we’ll get more support in the years to come.”

The full schedule of performances can be viewed on the OPM’s official Facebook page, facebook.com/PinoySingers. — ZBC

AirAsia Philippines says Q2 load factor hits 91%

PHILIPPINES AirAsia, Inc. flew 2.2 million passengers during the second quarter of 2019. — FILE PHOTO REUTERS

PHILIPPINES AirAsia, Inc. reported its load factor rose to 91% during the second quarter as it ferried 2.2 million passengers.

The Philippine unit of AirAsia Group Berhad said in a preliminary operating statistics report that it booked a load factor of 91% in the second quarter, growing from 87% in the same period last year.

Load factor is the measure used by airlines on how much an aircraft’s carrying capacity is utilized.

“AirAsia Philippines added an additional 18% capacity in (the second quarter of 2019) on increased frequencies of domestic routes,” said the report posted on the company’s website.

The increased capacity allowed AirAsia Philippines to record a 22% increase in the number of passengers flown during the three-month period to 2.2 million, from 1.8 million in the same period last year.

AirAsia Philippines President and Chief Executive Officer Dexter M. Comendador said in a chance interview last month the company performed “as good as the first quarter” in the April to June period.

“We increased our capacity, added aircraft. And travel is talagang booming sa Philippines kasi gumaganda ’yung economy natin [Travel is really booming in the Philippines because of our improving economy]. Since we’re offering the lowest fares, talagang ’yung mga bagong angat ng estado [those who are starting to earn more] are enabled to travel,” he said then.

The local unit of AirAsia Berhad posted a 12% growth in profit in the first quarter at P424.5 million, on the back of a 27% increase in revenues at P6.68 billion.

It is targeting to swing to profit by the end of 2019 from a loss of P2.11 billion last year. It also set its revenue target at P30 billion this year and about P50 billion in the next three years.

Meanwhile, AirAsia Philippines recently entered a partnership with flight school Omni Aviation Corp. for a cadet pilot training program.

The company said in a statement the program will offer up to two years of technical and leadership training to aspiring AirAsia cadets.

The carrier will shoulder the costs for its employees, and subsidize for those that are not part of the company, which the cadets will reimburse upon completion of the program.

“We’ve partnered with Omni Aviation, a leading Filipino training provider, to offer ten cadetships in the initial batches and the opportunity to embark on a new career with (AirAsia),” Mr. Comendador was quoted as saying. — Denise A. Valdez

Taylor Swift, Ariana Grande lead VMA nominations but K-Pop fans unhappy

LOS ANGELES — Taylor Swift and Ariana Grande dominated nominations on Tuesday for the MTV Video Music Awards (VMA) with 10 apiece, but some K-Pop fans cried foul when best-selling Korean bands were placed in a separate category.

Ms. Grande’s breakup anthem “thank u, next” and Ms. Swift’s “You Need to Calm Down,” in which she criticizes social media trolls and those who attack LGBTQ people, will contend for the top prizes of song of the year, best pop, and video of the year.

Ms. Grande also got a nod for artist of the year along with rapper Cardi B, 17-year-old newcomer Billie Eilish, Halsey, the Jonas Brothers, and Shawn Mendes.

Korean boy band BTS, which has led a K-Pop music wave in the United States and scored three No.1 albums on the Billboard chart in the past year, got just four nods, including three in the newly created K-Pop category.

“BTS outsold… EVERY SINGLE… artist in the artist of the year category but the VMAs didn’t wanna see that so they made a whole new category just to not acknowledge the power and influence BTS has had over the whole industry,” tweeted a BTS fan called Chioma.

“I am getting so sick of the westerners not giving BTS the due respect. They ignore stats, facts, achievements, charts and the people as well,” a user called Shivani Shintre posted on Twitter.

MTV did not return a call for comment.

Fans vote on the winners of the VMA awards, which will be announced at a show in Newark, New Jersey, on Aug. 26, but they do not vote on the nominations.

“Boy With Luv,” a collaboration between BTS and American singer Halsey, received nods for best collaboration, art direction, and choreography.

Other nominees in the K-Pop field include girl band BlackPink, Monsta X, NCT 127, EXO, and Tomorrow X Together.

The new Video for Good field features songs deemed to have raised awareness. It includes Swift’s “You Need to Calm Down,” Halsey’s female-empowering “Nightmare,” Lil Dicky’s environmentally themed “Earth,” and John Legend’s “Preach” about social injustices.

Other nominees in the category include The Killers’ “Land Of The Free,” a protest against US President Donald Trump’s planned wall on the US-Mexican border, and “Runaway Train” about missing children. — Reuters

Blade Runner star Rutger Hauer , 75

AMSTERDAM — Dutch actor Rutger Hauer, best known for his role in science fiction classic Blade Runner, died on July 19 after a short illness, Dutch news agency ANP reported on Wednesday, citing his family. He was 75.

Mr. Hauer, whose funeral took place in the Netherlands on Wednesday, appeared in a total of over 100 Dutch and international movies. He won a Golden Globe in 1988 for his role in Escape from Sobibor.

In Blade Runner, Mr. Hauer played the part of android Roy Batty, the adversary of “blade runner” Rick Deckard, played by Harrison Ford.

Mr. Hauer starred in Dutch classics and Hollywood blockbusters as well as in a whole range of B-movies, in which he was mostly cast as the villain.

“I’m not very good at judging movie scripts,” he said in 1994, adding that the less budget a movie had, the more they were willing to pay him.

Mr. Hauer, who led a quiet life in the north of the Netherlands when not in Hollywood, used his money and fame to help children and pregnant women with HIV/Aids through his non-profit Starfish Association.

Dutch director Paul Verhoeven, who made five movies and TV series with Mr. Hauer, said he had lost his “alter ego.”

“He was to me what Marcello Mastroianni was to Fellini. I have only good memories.” — Reuters

Unions claim SoT Bill will save firms money

DAYS before the Security of Tenure (SoT) Bill is due to lapse into law, labor organizations pushed back on the business sector’s claims that the measure will raise their operating costs, saying that the current “end-of-contract” or “endo” schemes that deny workers a pathway to permanent employment cost more.

“Pababa ang kanilang operating costs kasi ang (Their operating costs will fall because the) agency fee or the contractor’s fee is 10 to 15% over and above the minimum wage of the workers. Mawawala ang cost din nila sa paulit-ulit na training ng mga manggagawa (They will also save on the repeated need to train workers who are) under an endo scheme,” Trade Union Congress of the Philippines (TUCP) Vice President Luis M. Corral said in a briefing Thursday.

The TUCP was conducting the briefing alongside the Federation of Free Workers (FFW) and Partido Manggagawa (PM), in a bid to get President Rodrigo R. Duterte to sign Senate Bill 1826 or the SoT Bill.

The Senate version of the SoT Bill, which was adopted by the House, thereby eliminating the need to harmonize it with the House version, is tamer than the House legislation, they said. The equivalent House bill had stiffer penalties for engaging in fixed-term employment, which the bill also prohibited across the board.

Nevertheless, the unions said the bill now before the President is a good starting point for ensuring that workers are granted security of tenure.

TUCP President Raymond C. Mendoza said the possible passage of the SoT Bill this weekend will not stop unions from proposing more measures in Congress that will further expand security of tenure protections. He added: “We intend to introduce amendments in the 18th Congress (to reinstate) the lost provisions of the House version especially the ban on fixed-term employment.”

FFW President Sonny G. Matula said at the briefing: “The Security of Tenure Bill is a watered-down version of what the groups have lobbied for and expect from Congress. On the other hand, it has strong points that the labor sector can work on… The provisions on labor-only contracting with increased penalties would strongly address rampant labor-only contracting.”

According to a joint statement issued by the TUCP, FFW, and PM, they support an SoT Bill-authorized fine of P5 million on owners involved in labor-only contracting. The SoT Bill also broadens the definition of labor-only contracting, making it easier to establish whether a contractor is involved in illegal contractualization — Gillian M. Cortez

Jollibee’s overseas push may cost stock’s premium valuation

JOLLIBEE Foods Corp. is buying coffee chain Coffee Bean & Tea Leaf. — CATHY ROSE A. GARCIA

JOLLIBEE Foods Corp., one of the most expensive Philippine stocks, could see its premium valuation deteriorate as the Manila-based restaurant operator pursues overseas expansion to cut its reliance at home.

Jollibee’s push abroad will dilute its Philippine story that persuaded many investors to pay a premium for the stock, according to analysts including Andy dela Cruz and Rachelle Cruz at COL Financial Group, Inc. and AP Securities, Inc. The company, the most expensive in the Philippine Stock Exchange index after Universal Robina Corp., is moving closer to its goal of getting half its sales from abroad with its purchase of Coffee Bean & Tea Leaf.

Jollibee, which started as an ice cream parlor in 1975, has beaten McDonald’s Corp. in the Philippines, one of the few markets the US fastfood giant has failed to dominate. Coffee Bean will raise the overseas component of Jollibee’s sales to 36% from 20% in 2018, according to the company, which has a presence in 18 markets outside the Philippines through a mix of homegrown brands and overseas acquisitions.

“This could trigger a downward re-rating for the stock,” AP Securities’ Ms. Cruz said. “Its aggressive push outside could be a signal its home market is getting saturated. And if you valued Jollibee for its Philippine focus, would you still give it the same value with its growing overseas business?”

Investors may already be having a change of mind in tolerating a steep valuation for Jollibee. After the stock sank 8% to a nine-month low on Wednesday following the purchase’s announcement, the shares fell as much as 4.8% Thursday. The sell-off sank the stock’s multiple to 28.99 times its 12-month estimated earnings, the lowest since March 2017 and a discount to its 34.75 three-year average. The benchmark stock index has a 16.42 multiple.

With $21 million in losses in 2018, analysts said Coffee Bean will be a drag for Jollibee, which booked a 15% drop in first-quarter earnings, its first decline in profit since fourth quarter 2015 due to losses at Smashburger, a US fast-food joint it took over in 2018.

“Investors liked Jollibee because of its concentrated business in the Philippines, so there is a risk it could lose part of that premium valuation with its overseas push,” COL Financial’s Mr. Dela Cruz said. “But if they are able to turn around both Smashburger and Coffee Bean then the market might give back that valuation.”

Luis Limlingan, head of sales at Regina Capital Development Corp., said Jollibee could need far longer than the usual three years it takes to revitalize its acquired businesses as it juggles both Smashburger and Coffee Bean. “Jollibee will take on one of its most ambitious acquisition maneuvers to date,” he said. — Bloomberg

PetroWind allocates P1.4 billion to expand capacity of Aklan wind farm

By Victor V. Saulon, Sub-Editor

PETROWIND Energy, Inc. is studying options to move forward the capacity expansion of its wind farm in Aklan at a cost of P1.4 billion, including the creation of a retail electricity supply (RES) business to sell the additional energy output.

“Hopefully if we are able to secure the off-take, we should aim to award the major contracts by the fourth quarter of this year,” Francisco G. Delfin, Jr., PetroWind executive vice-president, said after company officials showed the existing 36-megawatt (MW) wind project to reporters on Thursday.

He said the company plans to add 14 MW more, or seven more wind turbine towers to add to the existing 18 towers. Five of the turbines are in the town of Malay and the rest are in the nearby Nabas town.

“Total cost would be P1.4 billion. Mas mababa na (It will be lower),” he said, referring to the comparison with the P4.6-billion cost in building the existing Nabas-1 wind energy capacity in 2014.

PetroWind is a joint-venture firm owned by Thailand-listed BCPG Public Co. Ltd. (40%), EEI Power Corp. (20%) and PetroGreen Energy Corp. (40%). PetroGreen is a 90%-owned subsidiary of the Yuchengco-led publicly listed PetroEnergy Resources Corp.

Mr. Delfin said an “off-taker” or buyer of the planned Nabas-2 additional output could be forged through three ways, all of which are being studied by the company.

The first option is a traditional bilateral power supply agreement (PSA) with Aklan Electric Cooperative (Akelco) as the target off-taker. The coop’s power demand is about 61 MW, half of which is taken by popular tourist destination Boracay Island.

“Many of the hotels and establishments (in Boracay) are going back to Akelco rather than running their own generators,” Mr. Delfin said, adding that PetroWind’s proposition of providing energy will not only stabilize the distribution system but will also promote investments, jobs and boost tax payments through real property taxes and permits.

He said foreign tourists have become more conscious about sustainability, thus sourcing green power could be an added boost to the hotels and resorts. But the mode means going through a competitive selection process (CSP), thus the need to better package the company’s energy output.

The second option is participating in the government’s renewable portfolio standards (RPS), which requires utilities to source a portion of energy needs from renewables.

Mr. Delfin said the company had taken note of the National Renewable Energy Board’s announcement that it was considering to promote and install an additional 2,000 MW through the mechanism. The Department of Energy has also made the same pronouncement.

The third option is entering the retail electricity supply business, he said. The venture, should it push through, would be under PetroGreen.

“There are other existing RES companies that are approaching us in preparation for the availability of Nabas-2,” he said. “We’re really exploring the retail segment of the power industry.”

“We’re going to be applying soon for our RES license,” he said, noting that Supreme Court had put on hold rules relating to retail competition and open access (RCOA), including the issuance of new licenses.

Mr. Delfin said PetroWind was looking at internally generated funds, through PetroEnergy’s previous stock rights offering, to finance Nabas-2, and through bank financing.

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