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Ayala Corp to raise P6 B from shares sale

Friday, September 12, 2008 [ philstar.com ]

Ayala Corp. is eyeing to raise P6 billion from the sale of preferred shares to fund investments in various areas that include business process outsourcing (BPO) space and overseas real estate.

Based on its registration statement filed with the Securities and Exchange Commission, Ayala Corp. will sell a total of 12 million preferred Class A shares for P500 each. BPI Capital Corp. has been tapped as issue manager and bookrunner for the purely domestic offering.

“Ayala Corp. is embarking on a new phase of business-building and these proceeds are expected to facilitate the company’s plans to establish new platforms for future growth as it contributes to explore investment opportunities in a variety of industries,” the company said.

The conglomerate earlier sold around three percent interest in Singapore Telecommunications Ltd. (SingTel), Southeast Asia’s largest telecommunications company, for P4.6 billion to raise funds for the expansion of its BPO operations and its electronics unit IMI Inc..

With 26 BPO projects in construction, the company is aiming to achieve its target of 700,000 square meters of gross lease area (GLA) by 2011 from only 36,000 square meters as of end-2006.

The group is completing the construction of the first six of the already projected 10 buildings it will put up under its mixed-use development plan for the UP North Science & Technology Park in Quezon City.

The company said the country can significantly increase its share of the global outsourcing sector from five percent to 10 percent in the next few years given the country’s natural advantages.

The offshore and outsourcing market is forecast to grow to $130 billion in 2010 from $46 billion in 2005. Last year, the Philippine O & O industry reported a 50 percent rise in revenues to $5 billion and this figure is seen to increase further to $13 billion by 2010.

Aside from BPO, the Ayala business empire also comprises real estate, telecommunications, banking and financial services, automotive, electronics manufacturing services, and water distribution.

Signifiying its confidence in the Philippine economy in spite of tough business conditions, Ayala has earmarked P55.28 billion for its capital expenditures this year, its highest by far and 41 percent higher than the amount spent in 2007. Bulk of the programmed capital budget will go to the real estate development projects of Ayala Land, expansion of Globe Telecom’s cellular network and broadband capacities and continued improvement of Manila Water’s distribution network.

Other funds will be used for the establishment of a regional manufacturing and sales footprint of IMI Inc., which currently has facilities in Laguna, Cebu, Cavite, China, Singapore, the US and Japan. — Zinnia dela Peña

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