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Ayala conglomerate raises P3.3B via treasury shares

By Neil Jerome C. Morales (The Philippine Star) | Updated May 31, 2013
MANILA, Philippines - The country’s oldest conglomerate Ayala Corp. (AC) took advantage of liquidity in the equity market to raise P3.3 billion in fresh capital for its power and infrastructure projects.
In a regulatory filing, AC said it completed the sale of 5.18 million common shares held in its treasury.
“This raised cash proceeds of approximately P3.3 billion, which AC intends to use to fund existing and potential sizable projects in the infrastructure and power sectors,” AC said.
“This new funding will further strengthen our balance sheet to build up our portfolio in these two sectors,” said AC president and chief operating officer Fernando Zobel de Ayala.
At P647 per share, AC’s shares were sold at a three percent discount compared with the previous closing price of P667.
The conglomerate earlier announced that is looking to invest up to $1 billion over the next five years for the capital intensive but high-yielding power and infrastructure sectors.
“We hope to be able to contribute in some measure to the development of these sectors and at the same time create future sources of earnings and value for the group,” Zobel said.
In the last two years, AC has committed more than $300 million of equity on power projects with roughly 900 megawatts (MW) of gross generating capacity.
“It is looking to increase its equity commitment to $500 million to $600 million in the next 12 to 18 months,” AC said.
Given its bullishness in the power sector, AC has entered into a robust pipeline of conventional and renewable power platforms through subsidiary AC Energy Holdings Inc.
Specifically, the conglomerate entered into an agreement to acquire around 20 percent of GN Power Mariveles Coal Plant Ltd. Co., the company behind a 600-MW coal facility in Bataan.
AC also has a 50-percent stake in South Luzon Thermal Energy Corp., which is building a 2x135-MW coal plant in Batangas in partnership with listed Trans Asia Oil and Development Corp.
For the renewable energy sector, AC owns 50 percent of NorthWind Power Development Corp., a 33-megawatt wind facility in Ilocos Norte, as well as shares in numerous mini-hydropower projects.
“AC continues to actively explore greenfield and acquisition opportunities given the significant power backlog in various regions,” the company said.
For the infrastructure segment, the company said it is focusing on the bidding for certain projects in the toll road, rail, and airport spaces.
AC, in partnership with Pangilinan-led Metro Pacific Investments Corp., prequalified to bid for the P60-billion Light Rail Transit Line 1 extension, and operations and maintenance project. The same consortium also prequalified to bid for the P1.72-bbillion automatic fare collection system for rail.
AC was also prequalified to submit an offer for the P17.5-billion operation and expansion of the Mactan-Cebu International Airport in partnership with Aboitiz Equity Ventures Inc. and ADC&HAS Airports Inc.
In 2011, the AC bagged the P2-billion Daang Hari-South Luzon Expressway Link Road, the first Public-Private Partnership (PPP) project to be bid out by the government.
In the first quarter, AC’s earnings hit P4.5 billion, up 29 percent from a year ago supported by higher income from its banking and property businesses.
AC, is also into real estate (Ayala Land Inc.),banking (Bank of the Philippine Islands), telecommunications (Globe Telecom, Inc.), utilities (Manila Water) and electronics (Integrated Microelectronics Inc.).
For this year, the conglomerate allotted P135 billion in capital expenditures that will bankroll investment programs in the property, telecommunications and water businesses. It will also support investments in the power and transport infrastructure sectors.
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