Pnb not keen on selling Cebu resort

August 20, 2009 Cebu City – Tourism Secretary Ace Durano believes the Philippine National Bank (PNB) will opt to develop the bank-owned Coral Reef Resort, a premier resort facility in Mactan, Cebu, instead of selling it to potential investors.

“I don’t think they are keen on selling the property because it is among the premier undeveloped properties left in Mactan,” Durano said in an interview with reporters recently.

Durano said PNB has acknowledged the huge potentials of Cebu’s tourism industry and may choose to capitalize on it by redeveloping the idle 36-hectare resort facility.

He bared PNB, which is owned by the Lucio Tan Group, is now “in its advance stage in the redevelopment plan.”

To recall, Coral Reef, was foreclosed by PNB in 2005 after its original owners, Palm Tree Estate Inc. and Bel Air Golf Inc. failed to pay its $420 million expansion loan incurred in 1997 from the PNB.

The loan was secured in 1997 when the value of the peso against the dollar was P24. The peso has depreciated since then, standing at its current value of P48, after hitting a high of P56 about four years ago.

The original owners, led by Kenichi Akimoto, President and Chairman of both Palm Tree and Bel Air, would like to get the resort back but apparently, PNB is not giving it up.

Potential investors who have expressed an interest in Coral Resort is the Philippine-Russia International Development Enterprise (PRIDE). Its President, Alexander Zusik, who was in Cebu recently, has signified willingness in pouring in at least $80 million for the resort.

Zusik said PRIDE would like to go on a joint venture with PNB and is “starting to coordinate (with PNB) and we are willing to go through the stages of getting endorsements from the local government.”

PRIDE is engaged in the construction of residential buildings, boutique hotels to large resort accommodations that are designed to be environment-friendly.

If plans favor their way, Zusik said the multi-billion dollar project could be completed in two years, with initial development including a 600-room hotel, 300-room apartment buildings, a business center covering 8,000-square meters of office space, a conference hall, and 20 small villas, among others infrastructure.

Apart from the Russian potential investor, other foreign groups which have expressed interest in the property include a Chinese and Korean firms.

However, Durano maintained that “it seems PNB is not desperate to dispose of Coral Reef and so far, the bank has not found a good selling price from among the proposals submitted.”

Durano, who was also aware of PRIDE’s proposal, also urged the company to look at other properties outside of Mactan that could be ripe for a resort facility. (Manila Bulletin)

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