Category: News

AC Infrastructure Holdings Corporation and Aboitiz Land, Inc., members of the Team Orion (Orion) consortium that submitted the highest complying bid for the Cavite-Laguna Expressway Project, together filed with the Office of the President a Comment on the Memorandum of Appeal put forward by Optimal Infrastructure Development, Inc. (Optimal) last June 27, 2014.

Optimal was disqualified from the bidding of the CALAX project after it submitted an erroneous and deficient bid security last June 2, 2014. Optimal acknowledged in its own Memorandum of Appeal that it indeed submitted an erroneous and defective bid. Optimal filed the Appeal two weeks after it was disqualified by the Special Bids and Awards Committee (SBAC) on the basis of this error and defect. The SBAC issued its Resolution disqualifying Optimal on June 11, 2014 (the “Resolution”).

Through counsel, Orion raises the following points:

1. Optimal cannot be allowed to undo and reset the bidding process simply by its own announcement of its alleged bid, given that it is non-verifiable and legally non-existent, ”a bid that was returned unopened and that was, in a manner of speaking, officially dead, especially after Appellant [Optimal] spoiled it as evidence.”

2. Public policy and the dictates of transparency and good governance demand strict compliance with the bidding rules.

3. The sanctity and integrity of the PPP framework and bidding process must be protected, lest confidence in the process is undermined.

4. Optimal forfeited its right to question the Resolution by its failure to appeal prior to its implementation and by its compliance with the Resolution through its appearance before the SBAC and acceptance of its Technical and Financial Bid in compliance with the Resolution. Optimal did not follow the legal process and went to the media to announce its alleged bid. It appealed to the Office of the President two weeks after its disqualification has been implemented and after public opinion has not resulted in the acceptance of the alleged bid, a result which Optimal now seeks from the Office of the President.

Based on the Build-Operate-Transfer (BOT) Law that governs the bidding of the CALAX project and all other Public Private Partnership projects, if a bidder fails to comply with any of the requirements of the bid, its financial proposal should be returned unopened and the bidder shall be disqualified from further participating in the bidding, regardless of whatever its bid amount might have been. This is the very purpose of the multi-stage bidding process being followed by the DPWH and the SBAC to help them determine the best available bid and prevent their judgment from being clouded by financial considerations.

The winner in a public bidding is not merely the bidder with the highest bid amount, but rather the bidder with the “highest complying bid”. The other bidders who participated, namely, the Metro Pacific Group and MTD Capital Bhd (Malaysia), both submitted bids that were compliant with the requirements and followed the rules. Optimal was the only participating bidder that failed to meet the requirements, and as a result, it was disqualified from further participating in the opening of the financial bid.

Consistent with bidding procedures and rules governing disqualification, the SBAC returned to Optimal, its unreviewed Technical envelope and unopened Financial Bid which the latter accepted last June 13, 2014. That same day, the SBAC opened the financial bids of the three other qualified bidders, namely Orion, Metro Pacific Group and MTD Capital Bhd (Malaysia). Orion submitted the highest qualified and compliant bid.

According to Team Orion spokesperson Mr. Roman Azanza III, “We filed a Motion to Intervene with Malacañang because we want our voice to be heard on this very important matter. We believe that nobody or no entity should ever be allowed to undermine the bidding process. There are rules and procedures that must be followed in a public bidding. If we do not follow it, and if we let errant participants act outside of the rules of a public bidding process, then the whole process will lose credibility.”

Mr. Azanza added, “We stand more to lose as a nation if we do not respect our own bidding rules and procedures. There remain nearly P900 billion worth of PPP infrastructure projects that will still have to be bid out to investors because government alone cannot undertake these projects. We need to keep the hard-earned confidence of investors in the stability and integrity of our public bidding process. Losing the confidence of investors would certainly have more of a “chilling effect on the Philippine economy”, particularly if any disqualified bidder could, after being disqualified and after the bidding process itself has been concluded, force to change the results by simply proclaiming a bid that, because of its own actions, cannot be verified to be existent in the first place.”

Following the Motion to Intervene filed by Team Orion, Malacañang is expected to study the matter and come to a decision shortly.

The Philippines’s oldest conglomerate, Ayala Corporation, continues to reap awards as it celebrates its 180th anniversary this year.

FinanceAsia, a leading regional business publication, named Ayala the country’s best managed company in its 14th annual poll. Launched in February this year and with a polling period of over a month, investors and analysts participated in the vote. Published in March, the results showed Ayala also clinching the top spot for corporate governance and corporate social responsibility. Ayala ranked a close second for investor relations.

Other Ayala group companies also made it to the list. Ayala Land ranked 3rd for corporate governance, 4th for management, and 7th for investor relations. Meanwhile, Globe clinched 2nd place among companies most committed to a strong dividend policy.

Key Ayala executives were also acknowledged. Jaime Augusto Zobel de Ayala, Chairman and CEO of Ayala, and Antonino T. Aquino, President and CEO of Ayala Land (who retired in April), were both recognized among top-ranking Philippine CEOs. Ayala Land’s Jaime E. Ysmael also made it to the list of best CFOs.

Ayala CFO Delfin Gonzalez, Jr., Mr. Aquino and new Ayala Land President and CEO Bernard Vincent O. Dy accepted the awards at the ceremony held last night, June 19, at Fairmont Makati.

Results of the Asia’s Best Companies poll may be viewed at: http://www.financeasia.com/News/375837,best-companies-poll-results-2014-8211-part-two.aspx

GNPower Kauswagan Ltd. Co. (GNPK), the joint venture company between AC Energy Holdings, Inc. (AC Energy), the power unit of conglomerate Ayala Corporation, and Power Partners Ltd. Co. (PPLC), engaged Shanghai Electric Power Construction Co. (SEPCC), a subsidiary of Power Construction Corporation of China, for the engineering, procurement and construction (EPC) of a US$1 billion-thermal facility in Kauswagan, Lanao Del Norte.

GNPK recently executed the EPC contract for the 4×138 megawatt thermal facility with construction scheduled to begin by the fourth quarter of this year. The plant will be equipped with cutting-edge equipment, including 4 Siemens steam turbines and generators manufactured in Germany. The project is expected to be completed within 3 years with the first unit operational by early 2017. GNPK has already executed well over 300MW of long term power purchase agreements and has secured its Environmental Compliance Certificate from the Department of Environment and Natural Resources.

“We recognize that Mindanao is in dire need of power and we are keen to provide the needed capacity at very reasonable and affordable terms”, AC Energy President and CEO John Eric Francia said. “We are also excited about this new addition to our growing pipeline of power projects. This puts us on track to achieve our goal of developing over 1000 megawatts of attributable capacity both in conventional and renewable technologies by 2016,” Mr. Francia added.

Earlier this year, AC Energy closed the acquisition of an approximately 17 percent ownership stake in GNPower Mariveles Coal Plant Ltd. Co. (GMCP), the owner and operator of a 600 megawatt coal fired power generating plant in Mariveles, Bataan. GMCP started full commercial operations last April.

*NOTHING FOLLOWS*

Ayala Corporation’s (Ayala) net income in the first quarter of 2014 grew by 22% to P5.5 billion. The strong growth was driven by its real estate, telecom, water and international businesses and was boosted by a P1.8 billion capital gain from the sale of Stream Global Services, Inc., one of its investee companies under its business process outsourcing unit. The strong performance of the business units combined with the capital gain offset the decline in the earnings contribution of its banking unit, Bank of the Philippine Islands (BPI), which reported lower earnings during the quarter as a result of the absence of trading gains compared to the first quarter of 2013. Excluding the capital gains during the period and the impact of BPI’s unusually high trading gains of P5.7 billion and Globe’s accelerated depreciation last year, Ayala’s net income would be up 24% year-on-year.

“We are glad to see the strong momentum continue across our core businesses as well as the improving profitability of our international businesses,” said Fernando Zobel de Ayala, President and Chief Operating Officer of Ayala. “We are confident this momentum will continue for the rest of the year as the fundamental drivers of domestic economy remain firmly in place. This will continue to underpin demand for our real estate products, banking, telecom and water services.”

Most of Ayala’s core businesses reported double-digit earnings growth year-on-year in the first quarter.

Its real estate unit, Ayala Land, reported a 25% growth in net income to P3.5 billion. Higher revenues across its residential, commercial leasing, and property services, combined with stable margins overall resulted in the sustained strong earnings growth.

Its telecom unit, Globe Telecom, reported a four-fold increase in net income to P2.9 billion from only P686 million in the same period last year. This was largely due to healthy top line growth and the tapering of accelerated depreciation charges following its network modernization program.

Ayala’s water unit, Manila Water Co., Inc.’s net income also rose by 9% to P1.4 billion. Revenues continued to grow as a result of higher billed volume, mainly from new business areas in Laguna, Boracay, and Clark as well as in Vietnam.

BPI’s earnings declined by 57% to P3.6 billion as previous year’s results included significant gains from trading securities. Its core banking business, however, remained strong as net interest income grew by 15% year-on-year, and non-interest income, excluding trading gains, also rose by 16% during the period.

Ayala’s international businesses registered continued improvement in earnings. Integrated Microelectronics, Inc.’s (IMI) net income increased twenty times to P226 million versus the first quarter last year as a result of higher sales volumes, better cost savings, and improved margins.

LiveIt also reported significant earnings improvement boosted by the sale of Stream Global Services, Inc. (Stream) and the improved performance of its investee companies. Share of revenues excluding Stream reached US$24.5 million, up 6% year-on-year, while share of earnings before interest, taxes, depreciation and amortization reached US$0.8 million, an improvement of US$0.7 million.

In all, the strong performance of the business units contributed a total of P6.9 billion in equity earnings to Ayala, 20% higher than in the same period last year.

Ayala continues to ramp up investments in its new businesses. For the year 2014, the holding company allotted P49 billion in capital expenditure mainly for its investment in BPI with its participation in the stock rights offering, on-going power projects which include the closing of its acquisition of its stake in GN Power Mariveles, and the transport infrastructure projects it has won thus far. It has also recently made progress in its entry in the education sector with the upcoming opening of nearly a dozen new high schools for secondary education under Affordable Private Education Center or APEC schools located in Quezon City, Caloocan, Marikina, Pasig and Manila.

As of the end of March 2014, parent company cash reached nearly P30 billion putting net debt to equity ratio at 0.43 to 1.

Earlier this month, Ayala successfully completed a US$300-million Exchangeable Bond issue which was 2.5 times oversubscribed. The bonds were subsequently listed at the Singapore Stock Exchange last May 5, 2014.

The above press statement pertains to the disclosure submitted to the SEC, PSE, and PDEx by Ayala CFO Delfin Gonzalez, Jr.

At its annual stockholders’ meeting held today, Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala announced that the Ayala group plans to spend P187 billion in capital expenditures in 2014. This is a record amount of investments for the group, surpassing the previous year’s P128 billion. The bulk of this will support Ayala Land’s expansion, Globe Telecom’s on-going network improvements, and Manila Water Company’s service improvements, as well as to fund the conglomerate’s expansion in power and transport infrastructure.

Mr. Zobel said, “The sustained positive momentum in the economy has, to a large extent, helped shape the Ayala group’s growth strategy over the past few years. Our combined group capital spending has expanded aggressively over the past five years amounting to nearly P500 billion as our core businesses in real estate, banking, telecommunications and water distribution executed aggressive growth strategies to seize investment opportunities in their respective sectors. We consider this a significant contribution to our national economy,” Mr. Zobel noted.

Ayala’s consolidated net income in 2013 grew by 22% to P12.8 billion, driven mainly by its real estate and banking units, as well as the improved performance of its international businesses. Its core net income, however, which excludes Globe’s accelerated depreciation charges was even higher at P14.8 billion. This earnings performance translates to a return on equity of 10.2 percent, an improvement from prior year’s 9.2 percent.

Ayala President and Chief Operating Officer, Mr. Fernando Zobel de Ayala said, “The sustained momentum of the Philippine economy remained conducive to the growth of Ayala’s businesses. Our core business units turned in a solid performance as we continued our efforts to aggressively expand in our markets and in new growth sectors.”

Ayala has made headway in the power and transport infrastructure sectors over the past three years. Mr. Zobel said, “We continued to build our portfolio in power and have a pipeline of projects. Our target is to invest a total of US$800 million in this sector by 2016. In the area of transport infrastructure, we have won two of the three projects that we bid for under the government’s public private partnership program and look forward to delivering these in the coming year.”

Ayala won the first PPP road project, the Daang Hari connector road, which is currently under construction and is expected to be completed within this year. It also recently signed the Concession Agreement for the Automated Fare Collection System project, which it won under the AF Consortium, a partnership between the Ayala and First Pacific groups.

Ayala share price closed at P613, up 18.3% year-to-date.

*NOTHING FOLLOWS*

Ayala Corporation (PSE:AC) (the “Company”), one of the largest conglomerates in the Philippines, announced today the pricing of the offering by AYC Finance Limited, a wholly-owned and guaranteed subsidiary of Ayala Corporation, of US$300,000,000 aggregate principal amount of its 0.50% bond due 2019 (the “Bonds”) exchangeable for common shares of Ayala Land, Inc. (“Ayala Land”). The Bonds have been offered outside the United States under Regulation S of the U.S. Securities Act of 1933 and to qualified institutional investors within the Philippines in transactions that do not require registration of the Bonds under the Philippine Securities Registration Code.

The Bonds will bear interest at a rate of 0.50% per year, payable semiannually. The Bonds will mature on May 2, 2019, unless earlier exchanged, redeemed or repurchased in accordance with the terms of the Bonds. The Bonds will be exchangeable at any time on or after June 11, 2014 up to the close of business on the 10th day prior to the maturity date. The Bonds will initially be exchangeable at P36.48 per Ayala Land share representing a premium of 20% over Ayala Land’s closing price on April 10, 2014. On May 2, 2017, the holders of the Bonds will have the right to require the Company to repurchase for cash all or part of their Bonds at a repurchase price equal to 100% of the principal amount of the Bonds. Starting May 2, 2017 the Company is able to call the Bond if the closing price of Ayala Land shares for any 30 consecutive Trading Days is at least 130% of the Exchange Price.

The offering is the first equity-linked international issuance by a Philippine issuer in the past two years. It has also achieved the lowest cost of financing across Asia ex-Japan in 2014.

“We are extremely pleased with the results of the offering and appreciate the trust of our investors. This offering is important as it enables us to continue the pursuit of investment opportunities in new growth areas and the realignment of Ayala Corporation’s portfolio mix to further optimize shareholder returns. Ayala Land remains an important and integral part of Ayala Corporation. It is a significant growth driver of the Ayala group and we continue to share synergies as we work on targeted projects particularly in energy and transport infrastructure.” said Jaime Augusto Zobel de Ayala, Chairman of Ayala Corporation.

The Company intends to use the net proceeds from the issue of the Bonds for general corporate purposes.

The offering is expected to close on or about May 2, 2014, subject to the satisfaction of customary closing conditions.

Goldman Sachs International acted as the sole international bookrunner of the Offering and BPI Capital acted as sole domestic lead manager.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase, nor shall there be any sale of, any of the securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities have not been and will not be registered under the securities laws of the United States of America.

About Ayala Corporation

Ayala Corporation is one of the largest conglomerates in the Philippines. The Company is organized as a holding company with equity interests in various companies active in real estate and hotels, financial services, telecommunications, water utilities, electronics, business processing outsourcing, automotive, power and transport infrastructure. Significant subsidiaries, associates and joint ventures include Ayala Land, Bank of the Philippine Islands, Globe Telecom and Manila Water Company.

About Ayala Land

Ayala Land is the real estate arm of Ayala Corporation and is a leading real estate company in the Philippines. It is engaged principally in the planning, development, subdivision and marketing of large-scale communities having a mix of residential, commercial, leisure and other uses. Its early defining project was the 1948 development of a planned mixed-use community on 930 hectares of swamp and grassland which is now the Makati Central Business district of Metro Manila. Today, it has a total of five brands under its residential development segment, being Ayala Land Premier, Alveo, Avida, Amaia and BellaVita, each targeting a distinct segment of the market. Ayala Land also has a total of 8,453 hectares of developable landbank across the country, including in locations such as the Makati Central Business District, Bonifacio Global City and Nuvali in Canlubang.

Investor Relations Contacts

Norma P. Torres, (632) 908 3446, torres.np@ayala.com.ph

Celeste M. Jovenir, (632) 908 3394, jovenir.cm@ayala.com.ph

Ayala Corporation’s consolidated net income in 2013 expanded by 22 percent to P12.8 billion on the back of sustained robust performance of its real estate and banking businesses. Without the impact of the accelerated depreciation from its telecom unit’s network transformation initiative, Ayala’s core net income jumped even higher to P14.8 billion, a 28-percent improvement from a year ago.

The conglomerate’s strong earnings performance was driven by equity earnings primarily from its banking and property units, boosted by significant improvements in equity earnings of its electronics and business process outsourcing businesses. Ayala’s equity earnings expanded 23 percent in 2013 to P17.6 billion.

“We are encouraged by the strong performance across our business units as they reap the benefits of the aggressive growth strategies they started a few years back. In turn, we have also been able to optimize earnings and value at the parent level as we continued to rebalance our portfolio and adjusted our ownership, particularly in our banking and water units, over the past year,” Ayala Corporation President and Chief Operating Officer Fernando Zobel de Ayala said. “As we ramp up our power business and as the economic environment remains sound, we are optimistic we can sustain double-digit earnings growth through 2014,” Mr. Zobel added.

Last year, the Ayala group collectively spent roughly P120 billion in capital expenditures to fund the various growth initiatives of its real estate, telecommunications and water units. Part of the amount was also used to bankroll the parent company’s own strategic initiatives, including the acquisition of additional stakes in the Bank of the Philippine Islands (BPI) and Manila Water Company (MWC) as well as its new investments in the power and transport infrastructure spaces.

Earlier this year, Ayala participated in BPI’s stock rights offering. It also closed the acquisition of an approximately 17 percent ownership stake in GNPower Mariveles Coal Plant Ltd. Co. GNPower is the owner of the 600-megawatt coal-fired power generating plant in Mariveles, Bataan province.

This year, the Ayala Group earmarked nearly P190 billion in capital expenditures to continue its investment programs in its real estate, banking, telecommunications, and water businesses as well as to ramp up its new businesses.

REAL ESTATE
Ayala Land, Inc.’s (ALI) net income rose by 30 percent to a record P11.7 billion on the back of double-digit revenue growth and stable margins across its business segments. ALI recorded P81.5 billion in total revenues, a 36-percent jump from its year-ago level as its property development, commercial leasing and construction businesses continued to post gains.

Revenues from property development expanded by 51 percent to P52 billion driven by strong gains from its residential segment as well as the sale of commercial lots in NUVALI and Arca South, which is the Food Terminal Inc. property ALI acquired in 2012. Revenues from commercial leasing grew 21 percent to P18 billion on a combination of higher average lease rates and occupied gross leasable area in shopping centers and offices coupled with the opening of new malls. This was boosted by higher revenues from hotels and resorts, which rose 64 percent to P4 billion, as new hotels and resorts begin to contribute. Revenues from construction and property management generated combined revenues of P26.3 billion, 29 percent higher than the previous year.

ALI spent P66 billion in capital expenditures in 2013, the bulk of which was used to fund projects in residential development and land acquisition. ALI has earmarked P70 billion in capital expenditures for 2014 as it continues to pursue its growth initiatives.

BANKING
BPI registered a 15-percent gain in net income to P18.8 billion, primarily driven by higher interest income on the back of a 21-percent growth in the bank’s loan portfolio. Higher fee-based income and foreign exchange trading likewise contributed to the bank’s earnings in 2013. This translated to a return on equity of 18 percent.

The double-digit loan growth was driven by higher corporate and consumer loans, which grew by 23 percent and 13 percent, respectively. While the net interest income expanded as a result of an 18-percent growth in the bank’s average asset base, net interest margin slightly contracted by 26 basis points to 3.3 percent owing to the competitive lending environment. BPI’s asset quality further improved with 90-day gross non-performing loan ratio closing at 1.8 percent from the 2.1 percent registered a year ago.

BPI’s total assets at the end of 2013 expanded 21 percent to P1.2 trillion. Deposits jumped 23 percent to P989 billion as a result of higher savings and demand deposits. The bank’s operating expenses rose 7 percent, with increases largely attributed to regulatory, technology and occupancy-related costs. Despite this, BPI managed to post modest gains in its cost-to-income ratio to 51 percent from 52 percent the previous year.

TELECOM
Globe Telecom sustained its growth momentum with core net income of P11.6 billion, a 13-percent increase year-on-year. This was driven by consolidated service revenues of P90.5 billion, up 9 percent from last year, led by the continued growth in mobile telephony and the demand for data connectivity across its mobile, broadband and fixed line businesses.

Mobile revenues, which account for 80 percent of total revenues, rose 8 percent to P72.8 billion on the back of sustained growth in postpaid revenues, which expanded by 18 percent to P27.1 billion. Prepaid revenues inched up 3 percent to P45.7 billion despite yield pressures from the shift to value-based from pay-per-use bucket. Globe’s mobile subscribers climbed 16 percent to 38.5 million in 2013. Its broadband business registered a sharp gain in both revenues and customer base, climbing 20 percent and 22 percent, respectively year-on-year. Fixed line data expanded by 13 percent to P4.7 billion, mitigating the decline in traditional fixed line voice services.

Globe’s operating expenses rose 13 percent to P54.0 billion, largely due to subsidy and recontracting costs. Globe’s reported net income declined 28 percent in 2013 owing to accelerated depreciation charges arising from its network transformation initiative.

WATER
MWC’s net income expanded by 5 percent in 2013 to P5.8 billion, driven by higher billed volume in the East Zone and increased contribution from new businesses. New businesses, which include operations in Laguna, Boracay, Clark and Vietnam, accounted for 10 percent of MWC’s earnings in 2013. Additional income from the liquidation of connection fees in the East Zone was also recognized, boosting net income.

Total revenues grew by 6 percent to P15.3 billion with total billed volume up 5 percent versus prior year. Revenues from its Vietnam operations, which consist of a leakage reduction project and two bulk water companies, Thu Duc Water B.O.O. Corporation and Kenh Dong Water Supply Joint Stock Company, grew by 42 percent from the previous year to P294 million.

MWC recently took over as exclusive water provider within the Laguna Technopark through its subsidiary, Laguna Water Company. It is also constructing a bulk water project in Cebu, which is expected to start operations in June.

INTERNATIONAL BUSINESSES
Ayala’s international businesses continued to improve despite lingering uncertainties in the global economy. Its electronics business, Integrated Microelectronics, Inc. (IMI), nearly doubled its net income in 2013 to US$10.5 million due mainly to business expansion in Europe and the Philippines. Despite a contraction in the electronics sector, IMI continued to register higher revenues in 2013, reaching US$745 million, a 12.6 percent growth from a year ago. This resilient performance was primarily driven by IMI’s diversification strategy. This includes the company’s move to higher-growth, higher margin niche markets in automotive, industrial, medical, and telecommunications segments.

Ayala’s business process outsourcing unit, LiveIt, posted a net income of US$1.7 million, an improvement of US$15.8 million over the previous year’s losses. Its share of revenues reached a record US$391 million, up 14 percent from the previous year, while share of EBITDA (earnings before interest, taxes, depreciation and amortization) grew by 31 percent to US$38 million. In 2014, LiveIt expects further growth and margin improvement in its operating units as they achieve additional scale.

Earlier this year, LiveIt sold its entire stake in Stream Global Services to Convergys Corporation. Liveit realized approximately US$145 million proceeds from its equity stake and a loan it provided Stream, while Ayala realized a net gain of P1.8 billion from the sale.

BALANCE SHEET
Ayala parent company ended the year with a gross debt of P70.9 billion and cash of P25.5 billion. Its balance sheet remains solid with parent company net debt to equity ratio at 0.32 and consolidated net debt to equity ratio at 0.98.

Last year, Ayala raised debt and equity capital for its expected pipeline of new projects. These included the reissuance of P10-billion, 15-year preferred class “B” shares. It also sold common shares held in treasury, raising P3.3 billion from the placement.

The above statement pertains to the disclosure made today, March 11, 2014, to the SEC, PSE, PDex, by Ayala CFO Delfin Gonzalez Jr.

Manila, Philippines, January 7, 2014 — Ayala Corp. announced that its BPO investment arm, LiveIt, has agreed to the combination of Stream Global Services, Inc., which is 29% owned by LiveIt, and Convergys Corporation, creating the second largest customer management services provider in the world. Once the transaction is complete, Convergys expects to have combined revenues of over $3 billion, and approximately 125,000 employees (including more than 53,000 in the Philippines) serving clients in 35 languages from over 135 contact centers in 25 countries.

Under the agreed terms, LiveIt and its two private equity partners, Ares Management and Providence Equity Partners, will sell 100% of their respective holdings in Stream, with LiveIt realizing approximately $145 million in total net equity proceeds. The transaction is expected to close in the first quarter of 2014, subject to satisfaction of customary closing conditions, including receipt of applicable regulatory approvals. Ayala Corp. expects to realize a net gain of approximately Pesos 2 billion ($46 million) through LiveIt.

Fred Ayala, LiveIt’s CEO, stated, “Our partners and we are pleased with this transaction, which we believe has strong strategic rationale. We are very proud of the Stream team, and grateful to the thousands of individuals who helped build it from an industry pioneer into a global leader.”

Mr. Ayala added, “We believe that the global IT-BPO industry will continue to expand, particularly in the Philippines, where we expect it to remain one of the country’s top generators of new jobs. Consequently, we are continuing to build our investee companies in the high growth segments of the industry, and starting to invest in the Education space, which we see as a critical enabler of the IT-BPO industry, given its ever increasing demand for well-trained Filipino talent.”

Ayala Corporation announced that it acquired 140 million common shares of Manila Water Co., Inc. representing a 5.7% interest in the water utility. The shares were acquired from its strategic partner, Mitsubishi Corporation, which has been a long-time partner of Ayala since 1974 and has been a shareholder of Manila Water since 1997.

Following the acquisition, Ayala’s stake in Manila Water will increase from 43.1% to 48.8%, while Mitsubishi will remain a shareholder with a 1.2% interest.

Ayala President and COO Fernando Zobel de Ayala said, “Ayala Corporation is pleased to have this opportunity to increase its stake in Manila Water. Manila Water has consistently shown its ability to deliver world-class water and wastewater services, which brings countless benefits to the local and international communities in which it operates. We believe in the long-term growth potential of Manila Water as it continues to expand outside the East Zone of Metro Manila into other areas here and abroad that are in critical need of reliable water and wastewater services.”

Apart from Manila Water’s concession in Metro Manila’s East Zone, the company currently has four domestic water businesses which include Boracay Water, Laguna Water, Clark Water, and a bulk water supply project in Cebu. Combined, these businesses serve a population of 8.0 million Filipinos and Manila Water has continued to expand coverage and consistently reduce non-revenue water or system leakage over the past years. Manila Water has also expanded into water businesses around the ASEAN region, particularly in Vietnam where its expertise in water service and quality has been validated with the acquisition of two bulk water supply facilities in Ho Chi Minh City. Its leakage reduction project in Ho Chi Minh City which started in 2008 has outperformed its target and has benefited 25% of the city’s 6 million population.

The transaction is valued at P2.8 billion and was executed via a special block sale through the Philippine Stock Exchange.

The above statement pertains to the disclosure made on December 16, 2013, to the SEC, PSE, PDex, by Ayala CFO Chito Gonzalez.

Two of the country’s largest and most prominent conglomerates, First Pacific group and Ayala group, submitted the best complying bid for the latest Public-Private Partnership (PPP) project, the P1.72-billion contactless automatic fare collection system (AFCS) that is expected to improve ridership experience for Light Rail Transit (LRT) and Metro Rail Transit (MRT) commuters through a modern and convenient fare collection system.

The Department of Transportation and Communications (DOTC) will conduct a customary post-bid evaluation before it awards the project to AF Consortium which is expected to be announced on December 23, 2013. The project will modernize the country’s transport systems by financing, designing, constructing, and managing the implementation and operation of a contactless AFCS based on smart card technology.

The AF Consortium is among the five consortia pre-qualified by the DOTC that submitted bids to this critical project, composed of groups that teamed up with foreign companies with established experience in similar ticketing systems, such as those in the technology, banking, transportation, and retail industries.

The AF Consortium is composed of BPI Card Finance Corporation as lead member, Globe Telecom, and AC Infrastructure Holdings Corp. of the Ayala group and Metro Pacific Investments Corp., Smart Communications and Meralco FinServe of the First Pacific group.

The AF Consortium partnered with MSI Global and SMRT. MSI Global developed the software for the automatic fare collection systems in Singapore and Bangkok, while SMRT currently operates Singapore’s mass transit system.

The DOTC first evaluated the Technical Proposal of the AF Consortium and gave it a passing mark last December 6, 2013 along with two other bidders. On December 9, 2013 it announced that the AF Consortium offered the best price.

The contactless payment system will facilitate efficient passenger transfer to other rail lines, and enhance fare collection efficiency by reducing leakage and fraud.

AFCS has the business potential for expansion to other transport modes and systems, such as buses, toll roads and the Philippine National Railway (PNR), in the future.

Capitalizing on Integrated Strength and Expertise for the Project’s Full Potential

The AF Consortium, through its combined skills in managing leading companies in the country, reflects a strong partnership that will help realize the latent possibilities of the system as well as expanding it to opportunities in the retail business.

“We are pleased to share a common ground with Ayala Corporation through the AFCS project that will help modernize our rail transport system. This strategic alliance will create integrated solutions that will improve public transportation through our vision to transform the country’s light rail transit system into a network very much like those in Hong Kong, Singapore, and other major cities in Asia,’’ MPIC chairman, Manuel V. Pangilinan said.

“We are delighted to build this exciting platform together with the First Pacific group. We will be leveraging the complementary strengths and assets of each consortium member, and we believe that we can help bring out the promising potential of AFCS not only as a transit fare collection method but as a broader and efficient payment ecosystem at par with global standards,” Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala said.

With this partnership, the two conglomerates’ much vaunted management experience, technical know-how, reputable customer base as well as financial clout, will combine for a formidable package to ensure the success of AFCS.

The AF Consortium has the option to expand the contactless card system to other businesses in and out of the transportation sector, such as in retail transactions making it a truly pervasive scheme that is envisioned to change the payments landscape in the country.

Full implementation of AFCS is targeted by the third quarter of 2015