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Ayala Land, port operator flock to banks for loans

Thursday, April 16, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]

AYALA LAND, Inc. has secured a P1-billion loan from state-owned Land Bank of the Philippines (Landbank) to help finance projects, while International Container Services, Inc. (ICTSI) of businessman Enrique K. Razon, Jr. has taken out $40 million from the Metropolitan Bank and Trust Co. to refinance debts.

In a disclosure, Ayala Land said the P1-billion Landbank loan would take the form of privately placed floating rate corporate notes.

Ayala Land said the notes would have a maturity of seven years, and that it would draw an initial amount within six months.

"Proceeds of the facility will be used by the company for general corporate purposes, as well as financing its capital expenditure program," Ayala Land said.

Earlier this year, Ayala Land raised P2.38 billion from privately placed fixed-rate corporate notes to partially fund P17.9 billion in capital expenditures for the year, which is lower than last year’s P18.9 billion.

The bulk of the budget will go to residential projects while the rest will be divided into land management, shopping centers, and other businesses.

Ayala Land’s net income went up by a tenth to P4.8 billion last year despite posting lower profits during the second half of the year.

The company has said it expects profits for the first half of the year to be lower although sales remain strong with a shift in focus to the middle and "affordable" market from the high-end market.

Ayala Land’s net income for the first half of 2008 surged by 42% to P1.83 billion from the sale of its shares in three subsidiaries — Piedmont Property Ventures, Inc., Stonehaven Land, Inc. and Streamwood Property, Inc. — to Andrew Tan-led Megaworld Corp. for P762 million. The three firms jointly operate a public parking facility along Valero Street in Makati.

Ayala Land operates in three units — Ayala Land Premier which caters to the high-end market, Alveo Land which is for the middle market, and Avida Land for the affordable segment.

Shares of the property developer went up by 3.57% or 20 centavos to P5.80 per share yesterday.

Multinational ICTSI, meanwhile, has signed a $40-million five-year term loan with Metro-bank. Proceeds will be used to partially refinance the company’s liabilities, ICTSI told the stock exchange.

ICTSI also announced that it had awarded four million shares to members of its management team under the company’s stock incentive plan.

The top port operator said late last year that it had signed P6.85 billion in medium-term loans with local banks and investors to fund projects and refinance debts. The loans will mature in five to seven years.

ICTSI incurred a 13% drop in net profits to P2.86 billion in 2008 from the preceding year’s P3.29 billion.

The company, however, posted a 37% increase in revenues to P20.6 billion in 2008.

ICTSI also reported a 24% increase in overall cargo handled to 3.73 million twenty-foot equivalent units in 2008 from three million the previous year.

The company attributed the decline in profits to new accounting rules and the weakening of the currencies in the countries where it operates, relative to the dollar, particularly in the last quarter of 2008.

ICTSI has port development and container terminal businesses in 11 countries. — K.J.R. Liu and J.B.F. Santos


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