Posted on
July 23, 2013 10:39:02 PM [ Businessworld Online ]
TWO
SUBSIDIARIES of Ayala Land, Inc. -- Alveo Land Corp. and Avida Land Corp. --
plan to sell retail bonds as soon as next month, according to a document from
the Securities and Exchange Commission (SEC).
“Ayala Land comes now with proposed maiden
retail bond offerings of its leading, established and fully owned subsidiaries
-- Alveo and Avida,” according to a July 17 memorandum to the SEC en banc from
the regulator’s Corporate Finance Department.
“With these
proposed retail bond offerings, Ayala Land hopes to be able to infuse the
market with… new investment choices for both retail and institution investors,”
the document added.
“Both Alveo
and Avida intend to launch their respective retail bond offerings in August
2013.”
Ayala Land
Investor Relations Officer Pamela Ann T. Perez, in a telephone interview
yesterday, confirmed the plan, but declined to say how much the Ayala Land
subsidiaries hope to raise from the retail bonds.
In a separate
text message, Ms. Perez noted, “Ayala Land continually considers all options
and opportunities to finance its projects and the projects of its
subsidiaries.”
The same SEC
document showed Alveo and Avida have asked the corporate regulator’s permission
not to appoint independent directors, a requirement for firms with registered
equity securities.
The
appointment of independent directors, which is a requirement under the
Securities Regulation Code, is designed to protect minority shareholders, SEC
Secretary Gerard M. Lukban explained in a telephone interview yesterday.
‘UNDULY
BURDENSOME’
But both
companies argued that they are 100% owned by Ayala Land, which means “there are
no minority shareholders of either Avida and Alveo.”
“It would
thus be unduly burdensome -- without a corresponding minority shareholders
benefit generated -- for Avida and Alveo to amend their by-laws, elect
directors independent of its only shareholder Ayala Land, and create the
committee as prescribed by the manual of Code of Corporate Governance,” they
said.
Mr. Lukban
said the commission en banc “is still looking into” the petition of Alveo and
Avida.
Avida caters
to the middle-income market, with product price ranging from P1.5 million to P5
million, while Alveo serves the upscale market with product price ranging from
P4 million to P12 million.
If fund
raising were to push through, the retail bonds of Alveo and Avida will come
after their parent, Ayala Land, on Friday last week launched the first tranche
of its P21-billion fixed-rate bonds to help finance capital expenditure.
The first
tranche, worth P15 billion with a coupon rate of 5%, will mature on 2024, Ayala
Land had said. The public offer will run until 5 p.m. of July 25.
The company
has earmarked P65.5 billion for capital expenditures this year -- P46 billion
for project completion and roughly P20 billion for land banking -- to bankroll
the construction of about 69 property projects worth a total of P129 billion.
Ayala Land in
March raised P12.2 billion from a share placement to bankroll the completion of
its projects.
Ayala Land’s
net income grew by 20.83% to P3.19 billion in the first quarter from P2.64
billion in the same three months last year as revenues climbed 39.35% to P18.52
billion from P13.29 billion.
Yesterday,
shares of Ayala Land gained 35 centavos or 1.15% to close at P30.90 apiece from
P30.55 each last Monday. -- Cliff Harvey C. Venzon
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