GOKONGWEI TO PUT UP MALL IN CHINA

MANILA, March 15, 2006
 (STAR) By Mary Ann Ll. Reyes - Business tycoon John Gokongwei is spending billions of pesos of his own money to put up a shopping mall in Shanghai, China, his first outside the Philippines.

Highly placed sources said Gokongwei has acquired a sizeable real property in Shanghai which will house not only a shopping mall but also a hotel and office buildings.

The mall will likely carry the name Robinsons and all spaces inside the mall will be leased to various locators, which will include Tesco, Europe’s biggest retail outlet. Worldwide, Tesco is the third largest, next only to Wal-mart and Carrefour.

"The shopping mall will basically be a real estate concern because the spaces will be leased out. The Gokongweis will not open their department store there because it will be very difficult to compete in China," the source told The STAR.

It was learned that after the shopping mall, Gokongwei will also finance the construction of a hotel and other buildings, also to be financed by private equity. A company registered in China was created specifically for this real estate venture.

Asked how much will be spent on this venture, JG Summit president Lance Gokongwei said this matter is confidential since it is a private investment of his father and that JG Summit, the holding company of the Gokongwei group, is not involved.

Robinsons Land Corp. owns and operates one of the largest and most successful chains of malls in the country. This includes Robinsons Manila, Galleria, Bacolod, Imus, Los Banos, Cebu, Novaliches, MetroEast, Iloilo, Star Mills, Sta. Rosa, Cagayan de Oro, Dasmarinas in Cavite, Lipa, Big-R Cainta, Angeles, Metro Bacolod, and Pioneer.

Gokongwei-flagship company Universal Robina Corp.(URC), has just raised $90 million from the sale of shares to foreign and local investors and is scouting for acquisition targets in the snack food line in Asia.

The younger Gokongwei earlier said the company planned to spend P3.4 billion of the net proceeds of the stock offering to fund the expansion of its beverage line in Vietnam and acquisition of additional snack lines in China, ASEAN countries and Vietnam.

The cash-rich company has mapped out a bold expansion strategy in Asia. Last August it acquired a Chinese cereal brand, Aces Foods, which is expected to bolster its sales in China. Also last year, it established a biscuit plant in Thailand and a candy and snack production facility in Vietnam.

URC also has operations in Indonesia, Malaysia, Hong Kong, Singapore and Vietnam.

The food and beverage company and its major shareholders recently offered a total of 635 million shares at P17 apiece, generating roughly P10.8 billion. Its sole international underwriter, UBS Investment Bank, has until this month to execute an option to issue an additional 95.2 million secondary shares. The major shareholders – JG Summit Holdings, Express Holdings Inc., and Robinsons Supermarket Corp. – also raised P5.5 billion from the sale of 325 million secondary shares.

If Universal Robina’s "greenshoe option" pushes through, it can raise an additional P1.6 billion for the major shareholders.

Gokongwei said the JG Summit group would use part of the proceeds to pay short-term debts.

There have also been persistent reports that the elderly Gokongwei is eyeing the acquisition of Equitable PCIBank. The Gokongwei family was a major shareholder of Philippine Commercial International Bank (PCIBank) before it was swallowed, with the help of the Government Service Insurance System (GSIS), by the smaller Equitable Banking Corp. during the Joseph Estrada era.


Chief News Editor: Sol Jose Vanzi

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