Rizal Philippines
History of Meralco
The real real estate deals are those where little or none of your money is used. And only brilliant deal makers entrepreneurs can do that.
Examples.
1. Purchase of Lopez from GTU of Meralco...
Under the Laurel Langley agreement, all US owned companies in the Phil by 19.., they shall be sold and transferred to Philippine owners, especially the utility firms like Meralco, Channel 7.
Classic was the purchase of Meralco by Lopezes from GTU
1. Lopez using personal money makes a DP; Lopez borrows from PCIBank
2. Lopez executes a Contract for term payment of Meralco (which could probably come from
earnings,) say 10 years
3. Lopez incorporates a holding company to hold the Meralco shares, keeping corporate structure
of Meralco intact: Meralco Securities Lopez of course are the majority stockholders
4. Meralco floats some of the shares at an IPO. The proceeds are used to pay off the PCIBank
loan.
Question: did Lopez use his own money to buy Meralco..? At the end he did not spend a single
centavo. Only the genius of Lopez could have thought of that...
2. A proposed memorial park project purchase in Cavite
This involves a purchase of a 20 year old memorial park that was not developed nor sold, nor were the land owners paid for the land. The investment calls for a total cash outlay of
payment for the landowner P32,000,000
land dev and permits 20,000,000
The memorial park is almost 3 hectares and has total yield of 7,000 plots.... Question by the prospective investor. Suppose I sell 1,500 plots at a deep discount, to raise P50,000,000 to cover the land acquisition and land development is it possible. I said yes. If this were to be done, where did the investor get his money. At the start of the project, there is no debt, his equity is 100% and the remaining inventory of 5,500 worth P60K each is his earnings. Neat eh... (The big problem challenge is how to sell the 1,500 plots cash now... How to do this) That is where my creativity comes in... That is where my value as a consultant and entrepreneur comes in.
The prospective investor is a deal maker and real OPM wheeler dealer.
3. A rescue operations for a troubled memorial park project
A troubled memorial park in the north, which we tried to help 3 years ago is in deep trouble. It has been foreclosed by a cooperative bank for 8 number huge. P15,000,000 and were invited to help. We have helped them with little cash infusion before. If we dont rescue the business, we would lose our exposure plus the P4 million of an angel investor whom we thought could take out the TCT from the lender.
Situation:
1. Area: 8.88 hectare, two parcels 5.9, and 2.9 all approved by the development permit by
the Sangguniang Bayan 16 years ago for total saleable plots of 18,000 plots. This was granted
to the Development Company which does not own the land. The land belongs to individuals a
and the License to Sell belongs to the company... Hmm problem
2. The license to sell covers 2.5 hectares only 2,500 plots of which only 200 remains.
3. Cap ex: P15,000,000 for the recovery of the land to be paid to the bank
P65,000,000 development cost.
Total P80,000,000.... Ang laki.... Nakakadiscourage...
4. The plots can be sold at P45,000 to P50,000 each and monthly amortization of between P800 to P1,000 is seen as acceptable...
How do you use OPM and how do you structure a deal where a significant ROI can be achieved?
Let us find out your strategic thinking and creative skills?
I all ready figured out how....
4. I was planning to buy a 4 hectare property from NIDC and we were in the final phase of the purchase. Our offer was P10m. However, Meralco beat us to draw by employing CB circular 1111. That of the purchase price of Philippine debt at the world market which was 50%. Meralco paid NIDC P22 million of govt securities with a net value of only P11 million. Brilliant. Eh...
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