By Jenniffer B. Austria

Alliance Global Group Inc., a company controlled by businessman Andrew Tan, will allocate up to P5.1 billion to subscribe to the stock rights offering of its property arm Megaworld Corp.

Alliance Global, in a disclosure to the stock exchange, said its board of directors approved the subscription to the pre-emptive rights offer up to the extent of the company?s entitlement.

The board also authorized the company to subscribe to all shares not taken up by other shareholders.

?To fund this subscription, the board approved the use of an amount ranging from P2.4 billion to P5.1 billion, depending on the results of the rights offer,? Alliance Global said.

The company plans to use the capital raised from a 2007 follow- on offering to finance the subscription.

?The board decided to realign the use of proceeds since it believes that the pre-emptive rights offer represents good investment opportunity for the company given the prospects of the property market and sustainability of Megaworld?s business, namely the middle- income residential and BPI markets,? the company said.

Alliance Global raised P10 billion during a follow-on offering in 2007.

Alliance Global, in a preliminary prospectus filed with the Securities and Exchange Commission, plans to spend P2 billion to build new alcohol distillery and another P1 billion to acquire an alcohol distillery.

The company also earmarked P1.5 billion as working capital of its recently acquired Emperador Distillery Inc., P1 billion for the expansion of its glass container facility and P1 billion for potential acquisition of a food and beverage company.

It allotted P1 billion for investment in new flavored alcoholic beverages production line and another P1 billion for the expansion of a alcoholic beverage production line.