Notes to Consolidated Financial Statements - 41 b. Joint Arrangements i. ABCC (Joint Venture)
ABCC was incorporated and registered with the Philippine SEC on July 11, 2007, with purpose of owning, using, improving, developing, subdividing, leasing, and holding of investments or otherwise, real estate of all kinds, including buildings, houses, apartments, and structures. On July 14, 2010, ADI, Wenceslao and ABCC entered into an Investment Agreement for the transfer of a total of 32 hectares of land respectively owned by Wenceslao and ADI to ABCC in exchange for the latter’s shares of stock. ABCC will develop the property into a high-end, mixed-use property project to be known as Alphaland Bay City On the same date, ABCC’s Board of Directors and stockholders approved the amendment of ABCC’s articles of incorporation for the following: a) Change in corporate name from “A.A. Land Properties Developers Corporation” to “Alphaland Bay City Corporation”; b) Change in the number of Board of Directors from five to six; and, c) Increase in the authorized capital stock from = P10,000 divided into 10,000 shares, with P =1 par value per share, to = P120.0 million divided into 120,000,000 shares, with P =1 par value per share. On December 23, 2010, ABCC, Wenceslao and ADI executed a Deed of Assignment and Memorandum of Agreement to form ABCC as a joint venture company, that is, 50-50 owned by Wenceslao and ADI. By virtue of these agreements, ABCC is in substance, a 50-50 owned entity of Wenceslao and ADI as of December 31, 2013 and 2012. Through various Deeds of Exchange and Memorandum of Agreement dated October 14, 2010, Wenceslao and ADI conveyed a total of 28 hectares of land in Aseana Business Park to ABCC in exchange for the latter’s shares of stock. Wenceslao and ADI have filed with the Bureau of Internal Revenue (BIR) a request for a confirmation that the mentioned transfer is tax-free. On April 13, 2012, the SEC approved ABCC’s amendment of the Articles of Incorporation and increase in its authorized capital stock and corresponding issuance of shares to Wenceslao and ADI. As of June 18, 2014, the confirmatory ruling has not yet been issued by the BIR and Wenceslao still has to transfer a portion of the said ABCC shares to ADI to effect the economic ownership interest stipulated in their Agreements. The Group’s total initial investment cost in the Joint Venture Company of = P7,979.5 million represents 10 hectares of land, more or less, with fair value of P =6,456.0 million, cash of P =1,000.0 million and subscription payable of = P523.5 million.