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South Luzon Thermal Energy Corporation, the joint venture company established by Ayala Corporation subsidiary AC Energy Holdings, Inc., and Trans-Asia Oil and Energy Development Corporation, to undertake the construction and operation of a 135-megawatt Circulating Fluidized Bed (CFB) power plant project, signed a P9-billion project loan facility with lenders Banco de Oro Unibank, Inc., Security Bank Corporation, and Rizal Commercial Banking Corporation. The loan will be used to fund the construction of the project which is expected to be operational by mid-2014.

Manila Water Company has been given the prestigious Asian Human Capital Award (AHCA) by the Singapore Ministry of Manpower, INSEAD, and CNBC Asia. It is the first Filipino company to win the award

The award, given to companies for their innovative and impactful human resource practices, recognized Manila Water’s transformation from a struggling, underperforming water utility, to a world-class water service provider.

The AHCA is considered a prime honor for its stringent standards. Its exhaustive selection process includes personal visits and research on all operational aspects of each nominee. In winning the award, Manila Water joins a select group of companies including Procter and Gamble, Ritz Carlton Singapore and Accenture Services India.

“We are deeply honored by this singular distinction which the Asian Human Capital Award has bestowed on us. It is an affirmation of the efforts that our people have invested in Manila Water in the last 14 years,” said Manila Water president and CEO Gerardo C. Ablaza, Jr. in accepting the award today at the Singapore Human Capital Summit 2011.

A Mission to Fulfill

“Manila Water’s experience of transformation is a unique one,” Ablaza shared. “It is a story about how providing a supportive environment that is conducive to productivity and openness while remodeling the system can pave the way to maximizing people’s full potential.”

Prior to Manila Water’s entry as a water service provider in 1997, the water situation in Metro Manila’s east zone faced serious challenges. Only 67% of the households then had piped water connections, with erratic water availability. Moreover, 63% or about 700 million liters of water per day was being lost to leaks and illegal connections.

As Manila Water began its operations in 1997, it saw an opportunity to enhance Filipinos’ quality of life. And as it created a long-term masterplan to renovate the water network, an organizational transformation was set in place.

Enabling and Empowering

The key lay in the hands of the new Manila Water organization. Absorbing over 2,000 former government employees or about 90% of the total workforce in 1997, the employees were found to be good, skilled workers, but lacked empowerment, being highly dependent on a centralized headquarters hierarchy then. Manila Water enabled these employees through training and in-house technical schools to maximize their productivity and potential. Equal opportunity for career advancement, even at the rank-and-file level, was given. A culture of merit based on performance and integrity was fostered, as well as the promotion of an entrepreneurial mindset, where managers were encouraged to run their assigned units as if these were their own business, looking for more innovative, efficient solutions with the customer’s needs in mind.

As people transformed, so did the organization through a decentralized setup that created better focus, productivity and accountability. Employees were transformed from mere followers to decision makers.

Manila Water also supplemented these changes with a robust and methodical Cadetship Program, an intensive six-month immersion for young graduates in all aspects of the business.

Transforming Into a World-Class Company

AHCA noted that Manila Water’s human capital programs and innovations have allowed the company to achieve remarkable improvements in all areas of performance, making the Ayala-led firm a leader in its industry.

Today, Manila Water is recognized as one of the world’s best in water efficiency. It is now branching out of Manila’s east zone, in markets such as the industrially advanced province of Laguna and the top tourist destination, Boracay; as well as other areas in the Asian region such as Vietnam and India.

Said Ablaza: “By believing in our people’s innate talents while complementing this with the proper training, support and rewards, Manila Water was able to transform not only its people but also the entire business. It is a partnership and a compact that have become instrumental in improving lives, building communities and contributing to nation building.”

Ayala reported a net income of P4.9 billion in the first half of the year, up 12% compared to the same period last year. The strong performance of its property, banking, water businesses as well as the sustained momentum of its telecom unit pushed equity earnings 9% higher to P6.2 billion.

Ayala president and chief operating officer Fernando Zobel de Ayala said, “The company’s results in the first half of this year reflect the positive economic environment and the robust domestic demand that has been sustained since last year. The aggressive moves of our business units to develop innovative products and services responsive to the needs of a much broader market have resulted in healthy revenue and earnings growth. We believe this momentum will continue through the rest of the year.”

REAL ESTATE
Ayala Land hit a record high in quarterly earnings in the second quarter, pushing first half net income 35% higher to P3.4 billion as revenues increased and margins expanded across its businesses. Revenues grew by 15% driven by strong residential sales and commercial leasing business. Property development revenues grew by 27% with steady completion and bookings of its projects. Residential project launches were well received resulting in record take-up in the second quarter. Revenues from the commercial leasing business of both retail and offices were up 17% as a result of improved occupancy and higher gross leasable areas. Revenues from other businesses such as Hotels and Resorts also improved reflecting a 25% growth year-on-year.

BANKING
Bank of the Philippine Islands saw double-digit growth in business volumes, revenues and net income. Net interest income increased by 12% and fee-based income rose by 7% year-on-year. Despite an 11% increase in operating expenses due to one-time CBA-related payments, the bank’s net income grew by 11% to P6.2 billion. Loans to customers increased by 16% driven the 24% growth in middle market loans, 20% increase in SMEs, 15% rise in top tier corporate loans and a 13% increase in consumer loans. Despite an expansion in loan book, asset quality continued to improve with non-performing loan ratio down to 1.8%.

TELECOM
Globe Telecom sustained the momentum of its mobile and broadband businesses with consolidated revenues reaching a new high of P16.6 billion in the second quarter. This put total service revenues in the first half of the year to P33 billion, 7% higher than last year’s. This was achieved despite a market that remains fiercely competitive and amidst price and cost pressures. Revenue growth was broad-based with mobile revenues up 5% as bulk and unlimited voice and SMS services continued to grow, along with mobile browsing revenues. Its broadband revenues jumped by 42% as a result of robust subscriber growth and stabilizing ARPUs. Globe’s mobile subscribers reached 28.4 million by the end of June, 15% higher year-on-year. Its broadband subscriber base also reached a new high of 1.3 million. As robust revenue growth outpaced the rise in operating expenses and other costs, consolidated EBITDA margin held steady at 55%. Net income in the first six months of the year rose by 9% to P5.5 billion with core net income at P5.6 billion.

WATER
Manila Water achieved steady growth in revenues and earnings. Revenues grew by 6% in the first half of the year to P5.8 billion driven by a combination of tariff adjustment and modest billed volume growth from the East concession zone and from operations in Laguna and Boracay. Net income increased by 2% to P2 billion. Manila Water’s customer base continued to expand with 36,000 new service connections coming from the current area as well as expansion areas in the East Zone. Non-revenue water continued to improve across all the three service areas ending at 11.5% in the East zone from 13.5%, 38% in Laguna from 44%, and 24% in Boracay from 35%.

AUTO
Ayala’s auto dealerships registered a 22% decline in revenues in the first half of the year due mainly to lower vehicle sales as a result of supply disruptions expected to last until the fourth quarter of the year. This resulted in a 71% decline in net income to P50 million in the first semester. Despite lower sales, however, Ayala dealerships maintained network leadership accounting for 46% of Honda and 32% of Isuzu sales nationwide.

ELECTRONICS
Integrated Microelectronics, Inc. recorded healthy revenue growth with sales up 39% year-on-year, which includes the sales of recently acquired PSi Technologies. China operations grew by 23% while IMI Philippines’ operations also posted growth of 6% driven by volumes from key customers. Higher direct labor costs, however, resulted in a decline in gross profit and margins in the first half of the year, which put net income excluding one-offs 52% lower during the period.

BUSINESS PROCESS OUTSOURCING (BPO)
The investee companies of LiveIt, our holding company for BPO investments, also achieved healthy revenue growth. Combined revenues were US$489 million in the first half of the year, of which LiveIt’s share was US$152 million, 16% higher than last year, due to the growth of client volumes across all investees. Greater scale and cost efficiencies resulted in LiveIt’s share of EBITDA increasing by 55% to US$11 million, Operating Net Income improving to a profit of nearly $1 million, and Reported Net Loss declining to $12 million. The Reported Net Loss was driven largely by non-cash charges such as amortization of intangibles for Stream and Integreon’s acquisitions, and interest expense related to the leverage buyout of Stream.

Ayala parent company ended the period with nearly P30 billion in cash and a net debt to equity ratio of 0.17 to 1. It successfully raised P10 billion from the issuance of its multiple put bond last May and subsequently redeemed its P5.8B preferred B shares last July.

Ayala recently made inroads in the power sector as it gears up to build a portfolio of power generating assets in both renewable and conventional sources. It recently closed a joint venture agreement with Trans-Asia Oil and Energy Development Corp., a subsidiary of the Phinma Group for the construction and operation of a 135-MW thermal plant in Calaca, Batangas.

The above statement pertains to the disclosure made today, August 12, 2011, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala chief finance officer Delfin Gonzalez, Jr.

Two of the country’s largest conglomerates are joining forces to augment the country’s power generation capacity.

Ayala Corporation, through its wholly-owned subsidiary, AC Energy Holdings, Inc. (AC Energy, formerly Michigan Power, Inc.), and PHINMA, Inc., through its energy arm, Trans-Asia Oil and Energy Development Corporation (Trans-Asia), have signed today a joint venture agreement for the construction and operation of a thermal power plant in Calaca, Batangas.

The joint venture company to be formed will be owned 50 percent by Trans-Asia and 50 percent by AC Energy.

The 135-megawatt power plant will employ the environment-friendly Circulating Fluidized Bed boiler technology. Total project cost may reach approximately P 12 billion and will be financed by a combination of debt and equity. The plant is expected to start commercial operations by mid 2014.

According to PHINMA president and Trans-Asia vice chairman Ramon R. Del Rosario, Jr., “We are glad to be partnering with the Ayala group in this joint venture project. We look forward to leveraging each other’s strengths in developing and running a modern and environment-friendly facility that will contribute to the country’s power supply generation through conventional source using clean technology.”

For his part, Ayala president and chief operating officer Fernando Zobel de Ayala said, “This project is part of our strategy to build a portfolio of power generation assets that combines conventional and renewable energy sources. This project will help contribute to building the much needed base load capacity to meet the growing demand for power in Luzon. This is simultaneous to our efforts to contribute in the development of alternative energy sources.”

Ayala, through AC Energy, recently formed several joint venture agreements to develop solar and mini-hydro power projects across various sites in the Philippines. It also recently acquired a 50 percent stake in Northwind Power that operates the wind farm in Bangui, Ilocos Norte.

Trans-Asia, through its wholly-owned subsidiary, Trans-Asia Renewable Energy Corporation (TAREC) has aggressively pursued the development of renewable energy and has been awarded service contracts with potential wind capacity of 350 MW, making it one of the largest wind developers in the country today.

ING Bank N.V. acted as financial advisor to Trans-Asia in the transaction.

Five Ayala companies led by parent company Ayala Corporation were ranked Platinum awardees in the Institute of Corporate Directors (ICD)’s 6th Annual Corporate Governance Scorecard for Publicly Listed Companies.

AC, Ayala Land, Globe Telecom, Manila Water Company, and Cebu Property Ventures Development Corporation were all given Platinum awards at the ICD Annual Dinner held on May 25 at the Peninsula Manila. This is the first time that the ICD has bestowed Platinum awards to companies that have garnered Gold awards for at least three consecutive years.

Explained ICD chairman Jesus Estanislao: “Platinum awardees carry the distinction of being the very best companies in terms of corporate governance compliance and which we believe are very well disposed to move beyond compliance and into higher levels of corporate governance standards and practices observed globally.”

All eight listed companies of the Ayala group made it to the Top 20 scorers of the 2010 Corporate Governance Scorecard.

Ranked in the Gold category were Cebu Holdings and Integrated Micro-Electronics, a new entrant to the ICD Scorecard Project after listing by way of introduction in the Philippine Stock Exchange last year. Both companies scored 95% or above in the governance scorecard.

Ranked in the Silver category with the rating of 94.9% was Bank of the Philippine Islands.

A non-stock, non-profit organization, ICD works closely with the Organisation for Economic Co-Operation and Development (OECD), the Global Corporate Governance Forum, and the International Corporate Governance Network on improving actual boardroom practices in the Philippines. ICD is a founding member and permanent secretariat of the Institute of Directors in East Asia Network.

For the last six years, ICD’s Corporate Governance Scorecard has been used by publicly listed companies as a tool to rate and benchmark their corporate governance practices relative to global and regional standards. The project is jointly administered with the Securities and Exchange Commission, PSE, Institute of Internal Auditors of the Philippines, Ateneo Law School, and Center for International Private Enterprise.

The scorecard ranks publicly listed companies in the areas of shareholder rights, equitable treatment of shareholders, role of stakeholders in governance, disclosure and transparency, and board responsibilities—key governance principles used as basis for corporate governance practices globally.

The awards were received by senior officers of the Ayala group led by AC senior counsel Mercedita Nolledo, AC general counsel Solomon Hermosura, presidents Gerardo Ablaza, Jr., Antonino Aquino, and Francis Monera, CFOs Jaime Ysmael, Albert Larrazabal, and Luis Juan Oreta, BPI senior executives Antonio Paner and Myra Sylienteng, and IMI controller Jaime Sanchez.

Ayala Corporation’s net income in the first quarter of 2011 grew by 16% to P2.45 billion. This was driven by the robust revenue and earnings growth of its real estate business, the solid growth of its banking operations, the sustained turnaround of its telecom unit and healthy core earnings of its water business. These business units accounted for the bulk of equity earnings. Total equity earnings during the quarter rose by 16% year-on-year.

“We are pleased with the growth momentum of the majority of our domestic businesses,” said Ayala president and chief operating officer Fernando Zobel de Ayala. “Their continued expansion across new and existing markets across the country will translate to increased market presence, greater exposure across a broader more diverse customer base, and a higher earnings growth trajectory for the group moving forward.”

Ayala Land, Inc.’s earnings in the first quarter of the year reached P1.6 billion, 36% higher than same period last year. Revenues reached P10.6 billion, up 15% year-on-year driven by robust residential and higher commercial leasing revenues. Residential revenues grew by 18% fuelled by the strong take-up and bookings across all residential brands. The company launched a total of 4,511 units during the quarter mostly from Alveo and Avida. Commercial leasing revenues increased by 16% largely from the 11% growth of shopping center revenues and the 25% rise in office leasing. Both posted higher lease rates as well as improving occupancy rates. Revenues from its hotels and resorts portfolio improved by 16% with the consolidation of its acquisition of 60% of El Nido Resorts which added 150 island resort rooms to its current portfolio. New projects are scheduled to come on stream. It recently opened Abreeza Mall, a 53,000-square-meter shopping center at the heart of Davao. It also broke ground on its new hotel, Kukun, in Cagayan de Oro.

Bank of the Philippine Islands registered first quarter net income of P2.9 billion, up 4% year-on-year. Revenues rose by 5% due mainly to higher interest income which rose by 15% to P6.3 billion as average asset base expanded by 12%. Loan growth remained healthy with net loans up 13% due to strong middle market/SME and consumer loans which rose by 22% and 15%, respectively. Corporate loans likewise grew albeit at a milder pace of 6%. Non-interest income, however, contracted by 9% due to lower gains from securities trading and foreign exchange and miscellaneous income. The bank’s total resources increased by 9% to P761 billion as deposits grew by 8% to P604 billion, while assets under management increased by 40% following its acquisition of the trust and investment management business of ING N.V. Manila.

Globe Telecom sustained its turnaround and posted record quarterly revenues of P16.5 billion in the first quarter, 8% higher year-on-year. The growth was driven by the continued uptick in its mobile business as well as the sustained growth momentum of the broadband segment. Mobile revenues rose by 4% driven by a 10% growth in postpaid revenues and a 2% increase in prepaid. Broadband and fixed-line revenues grew by 26% with broadband achieving a 52% increase year-on-year. Globe’s mobile subscriber base further increased to 27.3 million, a 14% expansion year-on-year while broadband subscribers rose by 40% to nearly 1.2 million. Subscriber growth improved with the launch of new and relevant services that allowed subscribers greater flexibility to customize their plans. Globe’s net income of P3 billion was the highest in the past seven quarters and was also 30% higher than the prior quarter.

Manila Water’s net income declined by 3% to P816 million largely as a result of mark-to-market losses realized on its bond. Excluding this, core income was up 14% to P1.2 billion. Revenue growth was healthy, up 5% to P2.7 billion due to an 11% increase in tariff and a 6% increase in household connections. Operating expenses increased mildly by 4% with well-controlled overhead and manpower costs. Non revenue water of 11.9% was better than same period last year of 14.2%. Manila Water continues to invest in the development of sewage and septage treatment facilities and is expanding aggressively outside its concession zone.

Ayala Automotive’s net income fell by 63% due to lower vehicle sales of its Honda dealerships, which declined by 27%. Ayala’s Honda dealerships remained the market leader with a 46% share of network sales. Its Isuzu dealerships recorded a 4% growth in sales and registered a percentage point improvement in market share to 32%.

Ayala’s international businesses showed healthy topline growth. Its electronics business, Integrated Micro-Electronics, Inc. registered a 35% growth in revenues to US$123 million but net income declined by 88% to US$374 thousand. The increase in turnkey operations which now account for 82% of revenues combined with higher direct material cost contributed to the margin pressure and earnings decline. Moreover, a one-time FX gain in 1Q10 contributed to the year-on-year decline in net income.

Its BPO unit LiveIt, also showed improvement. The combined revenues of LiveIt’s investee companies grew by 9% to US$243 million in the first quarter, and their EBITDA grew by 45% to US$22.5 million. LiveIt recorded operating net income of US$0.6 million, versus an operating net loss of US$3.1 million in the same period last year. In April, investee company HRMall, which offers outsourced HR services, acquired Los Angeles-based IQ BackOffice, which delivers finance and accounting BPO services and enables HRMall to offer a full range of highly efficient, market leading back office solutions to medium-sized clients globally.

AG Holdings also reversed losses incurred in the same period last year and reported a net income of P258 million in the first quarter. Its Asian operations posted a net income due mainly from gains realized from the exchange in ownership in Arch Capital and Arch Capital Asian Partners with The Rohatyn Group. Its US operations, however, continued to lose in the absence of any meaningful recovery in real estate markets in the U.S.

Outside of its current portfolio of businesses, Ayala recently made an initial foray in the power sector as it seeks to assemble a portfolio of power assets across various technologies. Following its joint venture with Mitsubishi Corporation for the development of solar energy in the Philippines, it acquired a 50% stake in Northwind Power Corporation, the operator of the first wind farm in Southeast Asia. It also forged a joint venture agreement with Sta. Clara Power Corp. for the development of run-of-the-river hydroelectric projects across the country.

Zobel commented that these investments will ultimately form part of a portfolio that balances renewable and conventional energy sources to meet the country’s need for base load capacity.

Ayala ended the quarter with cash of nearly P28 billion. It also recently successfully issued a P10 billion multiple put bond as it tapped sources of long-term funding in view of potential investments it is eyeing in the power and transport infrastructure sectors.

The above press statement pertains to the disclosure made today, May 13, 2011, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala managing director and head of corporate strategy and development, John Eric T. Francia.

Ayala Corporation today signed the underwriting agreement to issue a P10-billion fixed rate multiple put bond with a rate of 6.80%. Pricing was based on the past 15-day average of the PDST-R2 plus a spread of 30 basis points, consistent with the latest auction results for the 10-year fixed rate treasury notes which had a rate of 6.50%.

Ayala tapped BPI Capital Corporation as the issue coordinator for the deal. The joint underwriters are BDO Capital Corporation, BPI Capital Corporation, Citicorp Capital Philippines, Inc., First Metro Investment Corporation, Hong Kong and Shanghai Banking Corporation Limited, ING Bank, N.V., Manila Branch, RCBC Capital Corporation, and Standard Chartered Bank

Indicative demand for the bonds was strong, at an estimated P23 billion. The 10-year bond will mature in 2021, but will have multiple put options in 2016 and 2019.

Proceeds of the bond will be used to refinance the company’s P5.8-billion Preferred “B” shares whose call option was exercised by Ayala for payment on July 2011. The balance will be used to fund Ayala’s working capital requirements.

The bonds were Rated PRS Aaa by Philratings. The offer period for the bond is set for May 2 to May 6, with issue and listing date set for May 12.

This issue aims to attract retail investors who want to invest long-term funds. The bond structure provides two liquidity features, first through the 20% partial put option on the fifth year and subsequently the 100% full put option on the eighth year. This encourages investors to go beyond the normal five-year tenor. As an incentive for going longer tenor, investors get a better rate compared to the five-year rate of around 1 to 1.25%, and with an option to hold on to the same rate up to 10 years.

“The issue is the first in many aspects—the first multiple put bond in the market and the first corporate issue for 10 years for a P10-billion size. Our bond also has the lowest coupon rate of 6.80%,” according to Ramon G. Opulencia, treasurer of Ayala Corporation.

Integrated Micro-Electronics, Inc. (IMI), a leading provider of electronics manufacturing services (EMS), power semiconductor assembly and test services in the Asian region, today announced that it has entered into an agreement with EPIQ NV (“EPIQ”), for the acquisition by IMI of the EPIQ subsidiaries in Bulgaria, Mexico and the Czech Republic.

The purchase consideration of approximately €43 million will be a combination of cash and 200 million newly-issued IMI shares representing approximately 12% ownership in common shares on a fully diluted basis.

As part of IMI’s strategic initiatives, the acquisition will enable IMI to establish a global geographic footprint in manufacturing as well as in technology development and engineering.

Arthur R. Tan, IMI president and chief executive officer, said, “IMI is pursuing this valueenhancing acquisition to expand its customer base and to support its market specialization strategy in the automotive and industrial segments. As regional manufacturing picks up steam, we are expanding our operations to locations near our global customers in Europe and North America to be of better service to them.”

Following the completion of the acquisition, Gilles Bernard, EPIQ chief executive officer, will join the management team of IMI. Mr. Bernard said, “We are glad to become part of the IMI Group and look forward to providing EPIQ and IMI customers the access to a vastly increased range of facilities and capabilities.”

The acquisition is expected to be completed no later than the fourth quarter of 2011. ING Bank N.V. is acting as financial advisor to IMI in the transaction.

About IMI
Integrated Micro-Electronics Inc. (IMI) is a leading provider of electronics manufacturing services (EMS) and power semiconductor assembly and test services. It serves diversified markets that include those in the automotive, industrial, medical, solar energy, telecommunications infrastructure, storage device, and consumer electronics industries. Committed to cost-effective and top-quality customized solutions, IMI’s comprehensive capabilities and global manufacturing presence allow it to take on specific outsourcing needs. IMI’s flexible solutions encompass design and product development, manufacturing, and order fulfillment. IMI is consistently ranked among the top 30 EMS providers in the world. A subsidiary of Ayala Corporation, IMI is listed in the Philippine Stock Exchange. IMI has manufacturing and engineering facilities in the Philippines, Singapore, China, and the U.S.A. For more information, visit www.global-imi.com.

About EPIQ
EPIQ is an EMS provider that designs, produces, and sells electronic and electro-mechanical systems and sub-systems. These are drive- and/or control elements especially for supply in the automotive and industrial equipment markets, household appliances, and other applications with plastic parts and/or electronic components. EPIQ provides a wide range of integrated services from product development to mass production. Production comprises the design of printed circuits and/or spray casting of plastics up to and including the supply of assembled and tested systems and sub-systems. EPIQ also provides all the required engineering, R&D, and logistics management. EPIQ is headquartered in Europe with manufacturing and engineering facilities in France, Bulgaria, the Czech Republic, and Mexico. The EPIQ subsidiaries subject of the transaction generated a combined turnover of €90 million and net income of approximately €4 million for the financial year ended 31 December 2010.

The above press statement is from the disclosure made today to the Securities and Exchange Commission and the Philippine Stock Exchange by IMI.

Ayala Corporation through its wholly-owned subsidiary Michigan Power Inc. (MPI) entered into a joint venture (JV) with Sta. Clara Power Corporation (SCP) for the development of run-of-the-river (ROR) hydroelectric power projects across the Philippines.

MPI will take a 70% stake in the JV and has committed an initial equity infusion of about PhP 600 million.

The JV follows the company’s recent partnership with Mitsubishi Corporation for solar power and its acquisition of 50% of the iconic Northwind project in Ilocos for wind power. These are all in line with Ayala’s campaign to augment the country’s power supply primarily through renewable and clean energy.

ROR hydroelectric power plant operation involves “borrowing” some river water to turn its kinetic energy into electricity, and returning the same unpolluted water back into the river. It is “green” because it does not produce harmful emissions. Like other renewable power technologies, it is economical as it depends on the “free” energy of nature as fuel.

Ayala Corporation President and Chief Operating Officer, Mr. Fernando Zobel de Ayala said, “This venture builds on our current portfolio of renewable energy assets, which focuses on solar, wind and hydro power technologies. This is an important component of our plan to create a portfolio of power assets over the medium term that blends conventional and sustainable energy sources and contribute to the country’s energy requirements.”

Ayala Corp is one of the largest Philippine conglomerates with diversified business interests including investments in real estate, banking, telecommunications, water infrastructure, electronics, automotive, information technology, business process outsourcing and, recently, renewable energy.

Sta. Clara Power is a power generation company that focuses on ROR hydropower. It is majority-owned by Sta. Clara International Corporation, a construction company with local and overseas projects. Among Sta. Clara Power’s holdings, which will not be part of the JV, are stakes in Loboc hydro, Amlan hydro, and Bakun IPPA.

Ayala Corporation’s Business Process Outsourcing (BPO) investment company, LiveIt Investments Ltd., announced today that its investee company HRMall, which provides outsourced IT-enabled HR services out of Manila, has entered into a definitive agreement to acquire IQ BackOffice, LLC of Los Angeles, California, which delivers high quality, software-enabled, real-time, SAS70 Type II-certified finance and accounting BPO services to mid-sized companies in the U.S. IQ BackOffice targets companies with annual revenues of $50 million to $1 billion, but its business includes clients with revenues up to $10 billion.

The combined companies are valued at approximately $15 million. The management team of IQ BackOffice LLC, including David Schnitt, its founder and CEO, will purchase a 17.5% ownership interest in HRMall. LiveIt will own the balance of 82.5% of the company and will support the company’s strategy to accelerate its growth in its current markets in the U.S. and Asia.

HRMall will now be able to provide a complete suite of low-cost, best-in-class HR, finance and accounting services to the underserved mid-sized enterprise sector in the US and Asia, through a combination of proven technology, proprietary software and processes, deep domain expertise in multiple industries, and efficient outsourced operations that enable its clients to gain world-class back office capabilities while achieving 30% to 50% annual cost reduction. HRMall’s clients will now include over 30 US companies in the manufacturing and distribution, restaurant, hotel and hospitality, retail, professional services, property management, financial services and other industry sectors, as well as members of the Ayala group of companies (including Ayala Corporation, Ayala Land, Bank of the Philippine Islands, Globe Telecom, Manila Water and IMI). The Company will operate as HRMall in Asia and IQ BackOffice in the US, and will employ a total of over 300 employees out of its centers in Manila, Chennai, Mumbai and Los Angeles.

David Schnitt, who before starting IQ BackOffice had previously co-founded NASDAQ-listed professional services firm Resources Global Professionals, will be appointed Chief Executive Officer of HRMall, while Gilbert Santa Maria, a senior adviser to LiveIt who had previously headed eTelecare Global Solutions’ (now Stream Global Services) Philippines operations and global M&A, will be appointed chief operating officer and chief finance officer. Both will be based in Los Angeles, California. The management team of IQ BackOffice in the U.S. and India will be combining with the Manila-based HRMall leadership team.

IQ BackOffice’s founder and CEO, David Schnitt said: “I believe that HRMall’s existing HR services such as payroll are very complementary to the services we provide to our existing clients in the US, and that the Philippines greatly complements our service delivery capabilities from India and the US. Furthermore, LiveIt’s investment strategy and philosophy are very much in alignment with our operating philosophy, and its leadership team has the knowledge and experience to help us achieve our growth plans. I am very much looking forward to working with HRMall and the Ayala group of companies to create significant long-term value for our clients, associates and shareholders.”

John Philip Orbeta, chairman of HRMall, stated, “The combination with IQ BackOffice will allow us to achieve our vision of offering a full range of highly efficient, market leading back office solutions to medium-sized clients around the world. We warmly welcome the IQBackOffice team into the Ayala family.”

Fred Ayala, CEO of LiveIt, added, “This acquisition by HRMall adds a high growth, high margin and very complementary business to HRMall, with numerous cross selling and operating efficiency opportunities, and is expected to create significant value for LiveIt.”

All of the stockholders of HRMall and IQ BackOffice have approved and signed the sale and purchase documents. The transaction is subject to customary closing conditions, and is expected to close before April 30, 2011.

About HRMall
HRMall, Inc. is a BPO company focused on providing Human Resource related services – including outsourced payroll – to clients in the Asia Pacific region. Its processing and data centers are located in Manila, Philippines. It implements, deploys, hosts and processes technology-enabled HR systems, including Peoplesoft HCM, to its clients. It also provides talent management solutions, allowing human resources professionals to strengthen and personalize employee experiences, resulting in a more motivated and engaged workforce. HRMall provides outsourced services to clients across a wide variety of industry sectors including telecommunications, banking and financial services, utilities, BPO, real estate, retail, construction, property management, resort management, management services, cooperative, and high-tech manufacturing. It currently services clients with employee counts from 100 to 12,000, and has the capability for full-scale ERP implementations or pre-configured SaaS-type requirements. Additional information is available at www.HRMall.com.ph.

About IQ BackOffice
IQ BackOffice is a comprehensive Finance and Accounting BPO provider to the underserved segment of Mid-Sized Enterprises in the US with annual revenues between $50 million and $1 billion. It is headquartered in Los Angeles, CA with operations in Los Angeles, Chennai and Mumbai. Services include accounts payable, accounts receivable, payroll and complete general accounting outsourcing. IQ BackOffice leverages its proprietary software platform to enable IQ BackOffice and its clients to manage processes at world-class levels across the enterprise. IQ BackOffice is SAS70 Type II certified. It has over thirty public and private company clients across multiple industry verticals, including restaurants, manufacturing and distribution, hotels, entertainment, property management, financial services and other industries. IQ BackOffice employs over 200 people in the US and India and has an experienced management team with deep finance and accounting domain expertise. Additional information is available at www.IQBackOffice.com.

The above statement was based on the disclosure made today, April 18, 2011, to the Securities and Exchange Commission and Philippine Stock Exchange, by Ayala general counsel and compliance officer, Solomon M. Hermosura.