A multi-billion-peso offer made by SM Prime Holdings Inc. to take full control over the entire 295-South Road Properties (SRP) will practically wipe out Cebu City’s P6.3 billion (US8.8 million) debt incurred in building the SRP. 

‘That deal will wipe out our debt,’ said Joel Mari Yu, managing director of the Cebu Investment Promotions Centre (CIPC), the marketing arm of the SRP.  Top executives of SM Prime Holdings, the company behind SM malls, presented the offer to the CIPC on Wednesday but Yu refused to disclose the details. 

If the deal pushes through, the Cebu City government need not wait for 20 years to settle the 12.292 billion yen (US6.4 million) it borrowed from the Japan Bank for International Cooperation (JBIC) to build the SRP. 

The city is paying P1.5 million daily in interest alone for the JBIC loan.  SM Prime Holdings’ offer to take full control over the SRP, however, came a bit late as the city government has already concluded negotiations with US-based Bigfoot Global Solutions for a lease of two hectares and the purchase of 16 hectares, a deal worth P1.9 billion.  Bigfoot will occupy the two-hectare site in the next 25 years at a lease of P5 million a year. 

It already paid the City Government over half a million dollars as a five-year advance. Cebu City Mayor Tomas Osmena said a huge chunk of the SRP will go to SM but some parcels will be left for Bigfoot Global Solutions and other industries. 

Yu said SM initially offered to enter into a joint venture with the City Government, like the one between the Cebu Provincial Government and the Cebu Property Ventures and Development Corp. (CPVDC).  CPVDC, a subsidiary of Ayala Land Holdings Inc., developed a Cebu provincial government-owned lot into the information technology park now known as the Asia Town IT Park in Barangay Apas, Cebu City.