Month: October 2012

Volkswagen AG, Europe’s largest carmaker, has chosen to partner with one of the Philippines’ largest and most respected business groups, Ayala Corporation. In a statement issued from its headquarters in Wolfsburg, Germany, Volkswagen announced the appointment of Ayala’s wholly owned subsidiary, Ayala Automotive Holdings Corporation, as the Philippine distributor for Volkswagen passenger vehicles. This distributorship agreement brings together two premier corporate names to compete in an industry with high growth potential.

Ayala Corporation President & COO Fernando Zobel de Ayala noted, “We are very excited to bring Volkswagen’s technology and engineering expertise to the Philippine market. This partnership will no doubt enhance our current portfolio of auto brands given the dominant position of Volkswagen in the global automotive market. This will allow us to offer a much wider range of passenger vehicles in the local market, which will reinforce further Ayala’s strong presence in the local automotive industry.”

Weiming Soh, President, Commercial Operations, Greater China/ASEAN, Volkswagen AG, commented, “We are pleased to announce that Volkswagen has selected the Ayala Group as our future partner to distribute Volkswagen passenger vehicles in the Philippine market. Building on the Ayala Group’s excellent reputation and market knowledge, we are excited about offering consumers in the Philippines Volkswagen’s outstanding line-up of vehicles and providing them with an unparalleled level of sales and service experience. As an important part of Volkswagen’s ASEAN growth strategy, we, jointly with the Ayala Group, plan to rapidly and robustly establish the brand Volkswagen in the Philippines, contributing to our vision to become the world’s number one car manufacturer by 2018.”

The Volkswagen Group is the world’s second largest automobile manufacturer as of 2011, with global sales of 8.265 million units accounting for a 12.3% share of the passenger car market. Volkswagen has 99 production plants in 27 countries. As of the end of December 2011, Volkswagen has more than 500,000 employees worldwide and Volkswagen vehicles are sold in 153 countries.

Ayala Corporation has diversified business interests in the Philippines and is a leading player in real estate development, banking and financial services, telecommunications, water infrastructure development, electronics manufacturing, and business process outsourcing. It has recently entered new sectors with investments in power generation and transport infrastructure development.

The above statement pertains to the disclosure made on October 24, 2012, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala CFO Delfin Gonzalez, Jr.

Ayala Corporation (Ayala) announced that it entered into an agreement with DBS Bank Ltd. (DBS) to acquire part of the common shares held by DBS in the Bank of the Philippine Islands (BPI). Under the agreement, Ayala will purchase the BPI shares from DBS for a total of P 25.6 billion. The acquisition will result in a 10.4% increase in Ayala’s ownership stake in BPI.

DBS has been a strategic investor in BPI since 1999 and is one of the bank’s major shareholders with a 20.3% effective interest. This partial divestment is in line with DBS’ disciplined capital management and strengthens its capital position ahead of the introduction in Singapore of Basel III in 2013. The transaction enables DBS to maintain a meaningful exposure in BPI, which it deems to be an attractive investment, in a capital-efficient manner.

Ayala Chairman and CEO Mr. Jaime Augusto Zobel de Ayala noted that “DBS has been and will continue to be a valuable strategic partner in the governance and management of BPI. They have been a significant part of many of the bank’s milestones and achievements for over a decade. We look forward to continuing this partnership with them in succeeding years.”

Following the acquisition, Ayala’s effective ownership in BPI will increase from 33.6% to 44.0%, while DBS will retain a 9.9% effective ownership and will continue to be represented in the BPI board.

Ayala President and Chief Operating Officer, Mr. Fernando Zobel de Ayala said, “We believe this is a value and earnings accretive acquisition for Ayala given our view on the growth trajectory of the bank over the medium term. This reflects our confidence in the growth potential of BPI particularly amidst the projected expansion of the Philippine economy over the next few years. As a holding company we always look for ways to strengthen our portfolio and take advantage of opportunities that will enhance the value of our holdings while also continuing to ensure the stability of the shareholder base in each of our business units.”

Ayala’s Chief Finance Officer, Mr. Delfin Gonzalez pointed out that “Our current financial position and our low gearing level provide more than adequate room for us to invest in new growth areas while also optimizing the value of our existing portfolio.” As of the end of the first semester of 2012 Ayala had over P23 billion in cash.

Ayala earlier announced that it is planning to invest around US$1 billion over the next five years in green field and acquisition opportunities in the power sector as well as in transport infrastructure projects under the government’s public-private partnership program. It also recently declared it is issuing P10 billion worth of bonds. This is the second fund-raising initiative that the company is undertaking this year after the bond offer last May 2012 which raised for the company cash proceeds of P10 billion.

As of the first half of this year BPI registered a net income of P9.4 billion, a 52% growth from the same period last year driven by robust growth in net interest income and further boosted by trading gains. The bank is reportedly on track to deliver a sustainable 15% return on equity moving forward.

BPI shares last closed at P77.60 per share, up 40% year-to-date, while Ayala Corporation shares ended at P 425.80 per share, registering a gain of 37% year-to-date. Both have outperformed the performance of the Philippine Stock Market Composite Index which has risen 22% year-to-date.

The above statement pertains to the disclosure made on October 12, 2012, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala CFO Delfin Gonzalez, Jr.