Globe Asiatique (GA) IPO canceled as Pag-IBIG lawsuit looms

James Ryan Jonas

Globe Asiatique Realty Holdings Corp. (GA) submitted on September 6 a letter to the Philippine Stock Exchange (PSE) requesting to withdraw its P3.39 billion Initial Public Offering (IPO) slated this month.

Globe Asiatique cited as reason the resignation of BDO Capital and Investment Corporation as Issue Manager and Lead Underwriter. In its letter to the PSE, Globe Asiatique said BDO Capital did not talk to them about this decision and only knew of the latter’s resignation via a letter.

Offer price of P6.50-P10 per share

The real estate holding firm initially planned to issue to the public up to 136.37 million shares, with expected offer price of P6.50 to P10.00 per share. The final price was supposed to be decided on Friday, September 10, and listing to the Exchange tentatively set on September 30.

The resignation of BDO Capital as underwiter comes on the heels of a looming lawsuit from the Home Development Mutual Fund (Pag-IBIG Fund) after it was discovered that Globe Asiatique allegedly defrauded the state-run housing loan firm by taking out spurious loans.

Fake Pag-IBIG loans

Globe Asiatique is said to have received over P7 billion from Pag-IBIG, taken out supposedly on behalf of more than 9,000 borrowers in GA’s housing projects in Xevera Mabalacat and Xevera Bacolor in Pampanga.

Hundreds of these accounts were found to be fake, with some loans being made out to nonexistent borrowers or to homeowners who were unaware that their names were being used in Pag-IBIG loans. Pag-IBIG is currently in the process of blacklisting the property firm and preparing a lawsuit.

Globe Asiatique’s Projects

Beside the Xevera housing projects, Globe Asiatique is also the developer of the GA Twin Towers in Mandaluyong, the GA Sky Suites in Quezon Avenue, Chateau Valenzuela in Valenzuela City, Casa Ibiza in Antipolo City, and The Enclave in Pampanga.

In its letter to the PSE, Globe Asiatique said it believes “very strongly in the soundness of its business plan and model” and that it “does still offer an extremely attractive investment for the public and hopes to one day be able to realize its goal of launching a successful initial public offering.”

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James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.