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One potential target is a P10-billion non-core mall in Mandaluyong that CreditSights said is likely Starmall EDSA-Shaw, while another property in Southern Philippines is valued at about P5 billion.
The details were disclosed in a new report by CreditSights, a Fitch Group credit research firm, which independently assessed Vista Land’s finances after discussions with company management.
Vista Land management told CreditSights that asset sales were a viable option and buyers have shown interest, with some deals potentially closing this year or next.
A big mall portfolio
Vista Land owns 88.3 percent of Vistamalls Inc., formerly Starmalls Inc., which owns dozens of malls and commercial properties across the country, including:
Will a deal happen?
CreditSights said selling assets to outsiders would mark a significant shift for Vista Land (VLL), which has traditionally kept its property portfolio intact.
"Our biggest concern is whether management is ultimately willing to sell VLL assets to third parties, given VLL has not sold any of its malls, offices, and land bank to date. Being one of the crown jewels of the Villar group, we believe VLL will retain control of its assets as best as possible, with third party asset sales a last resort," CreditSights said in the report.
$420-million deadline
The bigger challenge is a $420-million US dollar bond due in July 2027, while CreditSights expects Vista Land to continue spending more cash than it generates through that year.
The weak peso makes that bill heavier: at around P62.70 to the dollar, $420 million is now worth about P26.3 billion, making every dollar Vista Land needs to repay more expensive.
Selling the two malls could raise about P15 billion, covering more than half of that amount, while sales of land and commercial units could bring in more cash.
More ways to raise billions
CreditSights sees other ways for Vista Land to find the money, including P25.5 billion that could be raised from selling dollar investments, P22 billion in bank credit lines freed after the PrimeWater deal and further support from billionaire Manuel Villar.
Another option is selling mature malls to VistaREIT, allowing Vista Land to raise cash while effectively keeping the properties within the Villar Group, although CreditSights said occupancy levels could delay that route.
Part of a wider reset
The possible mall sales come amid a broader restructuring across the Villar empire, which has been closing stores, selling assets and streamlining businesses after years of aggressive expansion around its property network.
The group has already sold PrimeWater, while rival retailers have moved into some locations previously occupied by AllDay and AllHome.
CreditSights described Vista Land's cash position as “precarious” and said the biggest question is whether it can raise enough money in time, although the company refinanced at least P12 billion in bank loans and privately placed bonds in the second quarter.
That continued access to local banks, together with its large pool of properties and investments, is a key reason CreditSights believes Vista Land has options despite the pressure.
Why CreditSights says Buy
CreditSights still gave Vista Land's 2027 and 2029 dollar bonds a Buy recommendation for investors willing to take higher risks, arguing their depressed prices underestimate the company's ability to find the money it needs.
Its bet is straightforward: Vista Land has a difficult refinancing job ahead, but enough malls, land, investments and financial backing to get through 2027 if it can turn those assets into cash fast enough.
—Edited by Miguel R. Camus
