International firms plan to buy Coral Reef resort

By Ehda M. Dagooc Updated February 03, 2009 12:00 AM

Two international companies have offered their interest to buy the 36-hectare property in Mactan Island, formerly the location of defunct Coral Reef Resort, now owned by Lucio Tan-led Philippine National Bank (PNB).

Department of Tourism (DOT) chief Joseph Ace Durano said that a Korean company has submitted its formal interest to buy the property, which is expected to eventually settle the ongoing rift with the former Japanese owner.

"Part of the conditions of PNB is for the buyer to absorb the legal concerns of the property," said Durano.

Because of the buyers' strong interest to immediately develop the property, Durano said one of the buyers may agree to take-in the legalities of the resort property at a lower price.

Originally, PNB has pegged the property's price at P800 million, Durano said negotiations are still ongoing. Asking price may lower to P750 million, considering that the approved buyer will have to settle the existing legal problems of the property.

Coral Reef Resort company operators Japanese-led Palm Tree Estate Inc., and Bell Air Golf and Country Club accused the Lucio Tan-led PNB of an illegal foreclosure of the property.

Palm Tree Estate Inc. and Bell Air Golf and Country Club led Kenichi Akimoto was able to secure a loan from PNB in 1997 of P340 million, and second loan of P80 million, for the development of the resort's expansion to build condominiums and exclusive golf club.

The construction of the expansion project started in 1994. The company was granted the loan three years later while the economic crisis hit the Asian region, affecting badly the Philippine economy.

PNB reportedly released the loans in tranches, which crippled the company's ongoing project that time.

In 2006, a China-based group attempted to ink a deal with the PNB to buy the idle Coral Reef Resort property.

The Chinese group supposedly planned to build a medium rise hotel and resort development with convention center, and develop the 9-hole golf course of Coral Reef, however, due to legal constraints, the deal was unfortunately called off.

This time, two multinational companies have expressed interest to buy the property, which is believed to have a huge potential for business.

Durano said as long as the buyer will take in the responsibilities of facing the legal problem of the property, PNB is willing to dispose it.

In a separate interview with Akimoto earlier, he said that the company will not surrender the resort property to PNB. Palm Tree plans to resume operations of the resort, as soon as the legal issues are solved.