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Ayala Land defers units’ fund raising

Posted on October 02, 2013 10:49:08 PM [ BusinessWorld Online ]
By Cliff Harvey C. Venzon, Reporter

PROPERTY DEVELOPER Ayala Land, Inc. has indefinitely postponed a planned P6-billion retail bond offering initially set for last month by its two subsidiaries, a senior company official said yesterday, citing the need for more time to comply with regulatory requirements.

Funding requirements for Alveo Land Corp. and Avida Land, Inc. will instead be covered by the P6-billion bond issuance the parent company launched just last Monday.

“We decided to issue the P6 billion bonds at Ayala Land, instead of Alveo and Avida,” Ayala Land Chief Financial Officer Jaime E. Ysmael said in a text message.

Alveo and Avida were supposed to have issued P3 billion worth of retail bonds each last month.

“We are still committed to bring them to the capital markets in the future -- maybe next year, but not definitely this year,” Mr. Ysmael said.

“We just need time to address additional requirements being requested by regulators.”

The Securities and Exchange Commission had told Alveo and Avida to appoint independent directors as part of requirements for selling registered securities and to protect the minority shareholders.

Both companies, however, argued that they are both 100% owned by Ayala Land, meaning “there are no minority shareholders of either Avida and Alveo.”

Mr. Ysmael said the requirement is still being “clarified with the Securities and Exchange Commission.”

Avida caters to the middle income market, with prices ranging from P1.5 million to P5 million, while Alveo serves the upscale market with a P4-12-million price range.

Mr. Ysmael said Ayala Land’s P6-billion bond issue last Monday -- which completed a P21-billion bond offering -- will be the last fund raising for Ayala Land this year.

Ayala Land had earmarked P65.5 billion for capital expenditure this year -- P46 billion for project completion and roughly P20 billion for land bank -- to bankroll construction of about 69 property projects worth a total of some P129 billion.

The company targets to end the year with 6,000 hectares of land bank from 5,400 last year.

Ayala Land ended the first half with a net income of P6.62 billion, up 23.28% from P5.37 billion a year ago.

The same comparative six-month periods saw revenues rising 35.67% to P36.63 billion from P27.0 billion, and cost and expenses increasing 39.00% to P27.51 billion from P19.79 billion.

Shares of Ayala Land gained 60 centavos or 2.19% to close P28.05 apiece yesterday from P27.45 each on Tuesday.
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