PROPERTY developer Ayala Land Inc. (ALI) said it has terminated the contract to acquire the landholdings of the Panlilio family under Boulevard Holdings Inc. (BHI) in Ternate, Cavite, after a failed due diligence audit on some 19 hectares of family-owned land.
In its letter to Boulevard Holdings, Ayala Land Vice President Jose Juan Jugo said that of the 19 hectares that it was buying, neither the residential land nor the residential condominium project met the minimum 20-percent development Ayala Land required for the contract to be consummated.
The anticipated development translates to about 577,000 square meters (sq m) for residential land and 183,600 sq m of floor area for residential condominium.
Jugo said the areas Ayala Land surveyed did not meet the minimum requirement. Jose Marcel Panlilio, chairman and CEO of BHI, offered an additional 6.5 hectares outside of the 19 hectares of land that Ayala Land was buying, but the titles to the property have yet to be verified at the appropriate government agency.
“Unfortunately, because of the absence of due-diligence audit document for this external parcel, no studies on it have started…. The ALI IC [investment committee] has considered this external parcel as un-acquirable within a workable and predictable period timeline and has decided to deploy resources for it to other company requirements,” Jugo, also group head at Ayala Land Premier, said in his letter.
“The ALI IC has determined that a project within the property under such conditions was not viable from a corporate standpoint,” he added.
Panlilio appealed for Ayala Land to reconsider its decision, as Boulevard Holdings, itself, does not have the expertise to optimize the value of the property.
The Ayala firm declined the Panlilio appeal and maintained its decision to terminate the deal the two parties signed six months earlier.
Panlilio earlier said Ayala Land has already earmarked P2 billion to P3 billion for the acquisition of huge tracts of land that will be converted into a resort and residential community.
“Now the game with ALI [has] ended. It’s time to get on with other things where a new door may open again. We can consider going back to all those we deferred while we handled our preferred partner for almost two years and also take more inputs from our professional realty advisors for the land assets,” Panlilio said.
He added that part of the reason for the aborted transaction was the P75-billion Ayala Land township project in Porac, Pampanga, where it would need all the money it has to underwrite its completion.
“BHI managers and its board members invested 1,300 man-hours this year from March, not counting the period from November 2012 through February 2014. We tried our very best to deliver to you your shareholders your expectations,” Panlilio said.