Month: July 2012

Ayala Corporation, one of the largest business groups in the country, completed today the placement of 15 million common shares held in its treasury. The shares were priced at P430 per share. This raised cash proceeds of P 6.45 billion for Ayala which it intends to use to fund several sizable projects it is eyeing in the infrastructure and power sectors.

Ayala is looking to invest up to US$1 billion over the next five years in the transport infrastructure and power generation sectors as it builds a portfolio of power generation assets and as it sets its sights on toll road, rail, and airport projects under the government’s public private partnership program (PPP).

On top of the Daang Hari–SLEX Connector road, which was the first PPP project rolled out and which Ayala won last December 2011, the company expressed interest to participate in other PPP projects expected to be bidded out soon. Projects of interest to the group include the NAIA Expressway, the Cavite-Laguna (CALA) Expressway, and the LRT Line 1 extension and O&M. Ayala recently formed a strategic partnership with Metro Pacific Investment Corp. to jointly pursue light rail projects in the Metro Manila area. Ayala said it is also keen to participate in the development of airports such as the Mactan Cebu International Airport.

In the power generation sector, Ayala has established a platform of conventional and renewable technologies and has committed around US$100 million of equity on approximately 180 megawatts of gross generating capacity. It began construction of a 135-megawatt CFB thermal plant in Calaca, Batangas in partnership with the Phinma group’s Trans Asia Oil and Development Corp. It is also currently working on a possible second phase of expansion of the plant. Recognizing the country’s need for both base load capacity and alternative energy sources, Ayala is also gradually building its portfolio of renewable energy sources in solar, wind and hydro technologies. Investments in these technologies will be shaped in part by the implementation of the feed-in-tariffs which the government is expected to announce in the coming months. Beyond these initiatives the company continues to actively pursue a robust pipeline of greenfield projects and acquisition opportunities in the power sector.

Ayala President and Chief Operating Officer, Mr. Fernando Zobel de Ayala, said, “The company is in a phase of active investment and is eyeing to build new businesses in power and transport infrastructure. In the same manner Ayala invested in the telecom and water sector in the past, we believe the power and infrastructure sectors are critical for the country’s growth and development. 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.”

While the company remains focused on the Philippines, it also continues to explore opportunities in other markets in the region. It recently acquired a 10% stake in Ho Chi Minh Infrastructure Investment Co. (CII), a leading player in the infrastructure sector in Vietnam. CII holds toll road concession agreements such as the 15.7-kilometer expansion of the existing Ha Noi Highway which connects the northeastern part of Ho Chi Minh City to Bien Hoa, an industrial center located in the southern part of Vietnam.

Ayala believes this investment provides strategic access to other infrastructure opportunities which may present opportunities for the Ayala group to establish a presence across several sectors in Vietnam.

Ayala Corporation’s share price has risen by 46% year-to-date with market capitalization of over P260 billion.

The above statement pertains to the disclosure made today to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala general counsel Solomon M. Hermosura.

Ayala Land, Inc. (ALI) successfully placed 680 million shares of its common stock at P20 per share for a total of P13.6 billion. The transaction was structured as a top-up placement where Ayala Corporation sold 680 million of its listed ALI shares and simultaneously subscribed to the same number of new ALI common shares.

Following this transaction, Ayala Corporation’s percentage ownership in the voting stock of ALI will be marginally reduced from 73.07% to 71.22% and its ownership in ALI’s common stock will be reduced from 53.06% to 50.43%.

The transaction is not expected to result in any impact on Ayala’s cash flow and net income.

The transaction was launched as a placement of 530 million shares at an indicative price range of P19.80 to P20.20 per share. Due to strong demand, ALI increased the offer size to 680 million shares. This landmark transaction represents the largest overnight placement by a real estate company in Southeast Asia since 2005, as well as the largest ever overnight placement in the Philippines.

ALI will use the proceeds of the share placement primarily to fund its next phase of expansion, enabling it to sustain its high growth trajectory. In addition to its previously announced P37 billion capital expenditure program for 2012, ALI has identified significant land banking opportunities amounting to approximately P36 billion over the next two to three years. Approximately P20 billion of this may be deployed in Makati City and other parts of Metro Manila and the balance in growth centers in Nuvali and other parts of Luzon and in the Visayas and Mindanao.

Furthermore, a portion of the proceeds is also expected to partially fund ALI’s strategic alliance with a group led by Mr. Ignacio R. Ortigas and resulting participation in OCLP Holdings, Inc., the parent company of Ortigas and Company Limited Partnership, for which it allocated an initial investment of P15 billion. This alliance is expected to provide ALI with access to prime properties in Metro Manila amounting to about 55 hectares.