Category: News

New four-year deal with US-based business intelligence services market leader further expands Integreon’s strong presence in the Philippines

Integreon, a leading global provider of integrated legal, research and business solutions, recently announced a multi-year extension to its existing landmark deal with SNL Financial (SNL). SNL is a premier provider of business intelligence and news for the banking, financial services, insurance, real estate, energy, metals/mining, and media/communications industries. Integreon has been providing business services to SNL since May 2012, and the recent expansion of the relationship extends the contract through January 2017.

The partnership will grow SNL’s existing relationship with Integreon in Manila and will further extend Integreon’s position as a market leading provider of business services to demanding professionals. Integreon already employs 400 people in Manila, providing a range of business services, legal services and document services to clients. Integreon’s largest investor, LiveIt Investments, is the BPO investment division of Philippine-based Ayala Corporation and has played a significant role in Integreon’s success in growing its global business, including its Philippine delivery capabilities.

Under the extended agreement, Integreon will help SNL build a team of approximately 300 or more financial research and business support professionals that will be located in dedicated delivery centers in Manila.

Tom Corbitt, Chief Administrative Officer at SNL Financial, said “Integreon has a good understanding of SNL’s client base since they’ve historically provided business critical services to many of the same customers. They’ve proven they can leverage their local knowledge and employer brand in the Manila market to quickly deliver the high caliber talent and physical infrastructure SNL needs to support our growing global client base, particularly as we expand into Asian markets.”

Robert Gogel, Chief Executive Officer, Integreon, said, “SNL is an impressive company with exciting growth plans. We are delighted that our ability to attract talent for them in Manila has led them to choose us for further expansion plans. We look forward to supporting SNL in their growth and delivery of high quality information services over the coming years.”

About Integreon
Integreon is a trusted provider of integrated legal, research and business support solutions to discerning professionals, including law firms and corporate law departments, leading corporations, financial services organisations and professional services firms. Integreon’s 2,000+ associates work globally to support its clients in areas such as market and competitive intelligence, discovery, legal process outsourcing (LPO), operating model transformation and back office redesign. Integreon also excels in business support services such as IT, document processing, finance, and HR. With unrivalled outsourcing experience and its industry-leading onshore and offshore capabilities, clients increasingly rely on Integreon to meet their needs in a demanding business environment. Integreon provides its services to its global client base with delivery capabilities from the US, UK, India, Philippines, South Africa and China. For more information about Integreon’s extensive range of services, please visit http://www.integreon.com.

Integreon is a privately held company and is majority owned by LiveIt Investments Ltd. and Actis. LiveIt Investments is the holding company for Ayala Corporation’s investments in Business Process Outsourcing and Knowledge Process Outsourcing. Founded in 1834, Ayala Corporation is the oldest business house and one of the largest conglomerates in the Philippines. Actis is a leading private equity investor in emerging markets with a growing portfolio of investments in Asia, Africa and Latin America. It currently has US$5 billion in funds under management which is managed by more than 100 investment professionals in 10 offices worldwide.

About SNL
SNL Financial is the premier provider of breaking news, financial data and expert analysis on business sectors critical to the global economy: Banking, Insurance, Financial Services, Real Estate, Energy and Media & Communications. SNL’s business intelligence service provides investment professionals, from leading Wall Street institutions to top corporate management, with access to an in-depth electronic database, available online and updated 24/7. For more information about SNL’s extensive offerings, please visit http://www.snl.com.

For additional information, please contact:

Ariella Steinreich
Burson-Marsteller
+1-212-614-4262
press@integreon.com

Ayala Corporation announced that it assisted its real estate unit, Ayala Land, Inc. in raising funds through a placement of 399,528,229 common shares at a price of P30.50 per share. The placement was conducted via an overnight bookbuilt offering structured as a top-up placement with all the proceeds to be received by Ayala Land.

The equity placement is expected to raise an aggregate of P12.2 billion in proceeds which Ayala Land intends to use for its next phase of expansion. Ayala Land has set aside P66 billion in planned capital expenditure this year for its various projects.

Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala said: “This second round of equity placement will further provide Ayala Land the flexibility to pursue its growth plans as it continues to build a robust development pipeline moving forward. We are delighted to assist Ayala Land in this transaction and once again encouraged by the support of the investing community.”

As a result of this transaction, Ayala Corporation’s holdings in ALI common shares will be reduced to 49.0% from 50.4% but it will retain voting control at over 70% ownership of the voting shares.

Ayala Corporation’s share price last closed at P586 per share reflecting a 13% increase year-to-date. Ayala Land’s share price has likewise increased by 24% year-to-date, closing at P32.85 per share yesterday.

The above statement is based on the disclosure made on March 6, 2013, to the Philippine Stock Exchange and Securities and Exchange Commission by Ayala Corporation CFO Delfin Gonzalez, Jr.

This announcement is not an offer for sale of securities in the United States. The securities referred to herein (the “Securities”) have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be sold in the United States absent registration or an exemption from registration under the Securities Act. The issuer of the Securities does not intend to register any part of the placement in the United States or to conduct a public offering of the Securities in the United States.

Ayala Young Leaders Congress (AYLC), the Ayala group’s flagship program for youth development, convened on its 15th year from February 5 to 8 in Alfonso, Cavite. Eighty-one student leaders from colleges and universities across the country attended the 15th AYLC to exchange views on the theme, “Leadership Imperative: Confronting and Adapting to Changing Realities.”

As keynote speaker, Hon. Mario Victor Leonen, Associate Justice of the Supreme Court of the Philippines, shared his experiences in the academe and government including challenges he faced in his former role as Chief Negotiator of the Peace Talks in Mindanao.

Annually, AYLC chooses eighty of the country’s most promising student leaders to participate in a four-day leadership summit that features in-depth workshops and consultation sessions, rigorous experiential learning activities, and inspiring talks and panel discussions from distinguished leaders of society.

This year, delegates had the chance to listen to and interact with Ayala group executives led by Ayala chairman emeritus Jaime Zobel de Ayala, chairman and CEO Jaime Augusto Zobel de Ayala, president and COO Fernando Zobel de Ayala, and Bank of the Philippine Islands (BPI) president Aurelio Montinola III. Officers from Ayala Land, BPI, Globe Telecom, Manila Water Company, Integrated Micro-Electronics, Ayala Automotive Holdings, and Ayala Foundation also helped facilitate some sessions.

In what alumni describe as a life-changing experience, AYLC is a holistic and intensive leadership program framed on the principles of “servant leadership.”

AYLC carefully selects individuals from various disciplines to provide concrete examples of servant leadership in action. This year’s panelists included Expo Mejia, coach of the Philippine Volcanoes, Maribel Garcia of The Mind Museum, and Rappler.com’s Glenda Gloria; Phinma’s Ramon del Rosario, Jr., former COMELEC chairman Christian Monsod, and Sister Eva Maano of the Foundation of Our Lady of Peace Mission; and AYLC alumni Bonar Laureto, executive director of Philippine Business for the Environment, Dr. Bryan Albert Lim, and Khal Mambuay-Campong, secretary-general of the Autonomous Region of Muslim Mindanao. Emily Abrera, Cheche Lazaro, and Gang Badoy-Capati moderated the panel sessions.

The congress was immediately followed by the AYLC community’s 3rd Alumni Grand Reunion held on February 9 at The Circuit in Makati City.

One highlight of the gathering was Starfish Fair 2013, a showcase of 10 development projects that AYLC alumni have initiated over the years. The fair serves as a venue to share best practices in organizing community projects and provides an opportunity to replicate and support the various initiatives.

Says John Philip S. Orbeta, managing director of Ayala Corporation and AYLC program director: “These are exciting times for all of us as our alumni community has formed the Ayala Young Leaders Alumni Association, Inc., and is set to explore more projects that serve communities.”

With 1,043 alumni involved in various sectors here and abroad, AYLC forms a strong network of young leaders who are values oriented and have a sense of stewardship for their respective communities. Individually and collectively, they have been active in relief operations, leadership camps, educational and livelihood programs, medical missions, and other development work.

“We are celebrating more than just 15 years of a leadership congress,” says Orbeta. “We are celebrating 15 years of young Filipinos making a difference in the communities they serve. It is also a promise to do more for the country in the years to come.”

Palm Concepcion Power Corporation (PCPC) has begun the construction of the first phase of the 2 x 135-megawatt power plant project in Northern Iloilo.

PCPC is a joint venture of AC Energy Holdings, Inc., Palm Thermal Consolidated Holdings Corporation, a subsidiary of A. Brown Company, Inc., and Jin Navitas Resource, Inc. (JNRI).

Located in a 30-hectare property in Sitio Puntales, Bry. Nipa, Concepcion, Iloilo, the facility is expected to be operational by 2015.

The new clean coal power plant will help address the increasing power requirements of Iloilo, Aklan, Antique and Capiz in the island of Panay as well as neighboring provinces of Negros and Guimaras, considering the fast economic growth in the region.

“Visayas is in development mode and more investments are expected in the next 3 to 5 years. This will mean significant power requirements, especially in Western Visayas where power supply is limited,” said AC Energy president Eric Francia.

He added: “Palm Concepcion thermal power plant anticipates such need and is a project that is ready to be constructed. AC Energy was invited by project proponent A. Brown to partner with them and Jin Navitas to make this project a reality.”

The project, with an estimated cost of P12.5 billion, will use Circulating Fluidized Bed Combustion (CFBC) technology in generating thermal energy from coal. In this technology, limestone is used in the fluidized bed to minimize production of harmful chemicals to acceptable limits. It is also the only coal-fired power plant in Panay to use a reheat technology that requires less fuel to produce thermal power.

Local officials led by Iloilo Gov. Arthur Defensor, Sr., House of Representatives deputy speaker and member of the Joint Power Commission Cong. Erin Tañada, and Concepcion Mayor Millard Villanueva participated in the groundbreaking ceremony held on January 15.

Gov. Defensor in his message welcomed the construction of the new Concepcion plant and emphasized its importance in the anticipated growth and development in key areas of the province. Deputy Speaker Tañada mentioned the benefits to the people of Visayas who will experience not only a more stable power supply but also a more environment friendly source of power.

Ayala Corporation announced today that it entered into a sale and purchase agreement to acquire 100% of the interests held by an affiliate of a fund advised by Denham Capital in GNPower Mariveles Coal Plant Ltd. Co. (GMCP). GMCP is the owner of the 2 x 300-MW coal-fired power generating plant in Mariveles, Bataan province.

Pursuant to such agreement and subject to lenders’ consent and other customary closing conditions, Ayala has agreed to acquire ownership interests of approximately 17.1% in GMCP and its Mariveles Power Plant for a total purchase price of approximately US$155.0 million. The Mariveles Power Plant is currently undergoing commissioning. The other sponsors of the Mariveles Power Plant are power project developer Power Partners, Ltd. Co. and Sithe Global Power LLC, a company owned by investors of The Blackstone Group. Ayala intends to hold its investment in GMCP through its wholly owned energy subsidiary, AC Energy Holdings, Inc.

According to John Eric T. Francia, Ayala managing director and AC Energy president, “The Mariveles Power Plant is a major capacity addition that is critical to alleviating potential power shortages in the Luzon grid. It is utilizing pulverized coal technology designed to meet global standards and contributes to Ayala’s goal of providing low-cost electricity to the country.”

Ayala president and COO Fernando Zobel de Ayala, for his part, said, “We are pleased with the addition of the Mariveles Power Plant to Ayala’s growing portfolio of energy projects. We are delighted to be working with Sithe Global Power and Power Partners in this endeavor. Our investment reflects the Ayala group’s support for the energy and infrastructure needs of our country and our confidence in its bright growth prospects.”

J. P. Morgan served as financial advisor to Ayala on this transaction.

At a meeting held today, December 12, 2012, the Board of Directors of Bank of the Philippine Islands (BPI) approved a succession plan recommended by its Nomination Committee and Personnel and Compensation Committee. Cezar P. Consing will be nominated to succeed Aurelio R. Montinola III as President and CEO at the next organizational meeting of the Board immediately following the stockholders’ meeting scheduled on April 18, 2013. This movement is in line with the traditional retirement practices in BPI and forms part of the normal succession process.

Consing has over 25 years of experience in international finance, particularly in investment banking, commercial banking, and private equity. He has led large groups of highly qualified finance professionals and has managed and grown complex businesses in highly competitive environments. He has also been directly involved in several significant financial transactions in Asia and in the Philippines.

Consing’s involvement with Bank of the Philippine Islands started in 1981 when he became the youngest management trainee in the corporate planning department and later moved to corporate banking, where he eventually headed the Conglomerate and Multinational Coverage team. He was appointed Assistant Vice President in corporate banking in 1985. He then joined J.P. Morgan & Co. as a transferee from BPI and built a 20-year career in investment banking while based in Hong Kong and Singapore, the last seven years of which as head or co-head of investment banking for Asia Pacific between 1997 and 2004. From 2001, he was president of J.P. Morgan Securities (Asia Pacific) Ltd. and had overall responsibility for the combined Asian investment banking businesses of J.P. Morgan, Chase Manhattan, and Jardine Fleming.

At the board level, Consing represented J.P. Morgan on the Boards of Directors of BPI and BPI Capital in 1995 to 2000. He rejoined the BPI Board as an independent director from 2004 to 2007, and then again, in 2010, where he currently serves as an independent director and a member of its personnel and risk management committee.

Since 2004, Consing has been a partner of The Rohatyn Group, a US$3 billion international hedge fund and private equity firm focused exclusively on the emerging markets. He runs the firm’s Hong Kong office and is responsible for its private equity business in Asia, including oversight of the firm’s two joint ventures in the region, Arch Capital in Hong Kong, and CapAsia in Singapore. He has also served as independent board director of CIMB Group Holdings, CIMB Group Sdn Berhad in Malaysia, and CIMB Securities International in Singapore, as well as of First Gen Corporation (since 2005) and Jollibee Foods Corporation (since 2010). He previously served as member of the advisory board and executive committee of Asian Youth Orchestra.

Consing, 53, earned a degree in Economics (accelerated program, magna cum laude) from De La Salle University in 1979, and a master’s degree in Applied Economics from the University of Michigan in 1980.

Says BPI Chairman Jaime Augusto Zobel de Ayala, “After an extensive search process, we are very pleased to announce the selection of Cezar (Bong) Consing as the ideal candidate to lead the Bank of the Philippines Islands in this increasingly complex financial market environment. His extensive experience in international banking and financial services, combined with his knowledge of BPI over a large span of years, will be an exciting addition to our exceptional management team.”

From now until April 2013, Consing and Montinola will be working together to ensure a smooth transition in the management of the bank. Montinola will continue to serve as a member of the board of BPI upon the transition in April.

The above statement pertains to the disclosure made today, December 12, 2012, to the Securities and Exchange Commission and Philippine Stock Exchange, by BPI corporate secretary Carlos Aquino.

Two of the country’s largest business groups, Ayala Corporation (Ayala) and Aboitiz Equity Ventures, Inc. (AEV) through its subsidiary AboitizLand, have together signed a Memorandum of Understanding with ADC & HAS Airports Corporation (ADC&HAS) to form a consortium that will participate in the planned public bidding of the Mactan-Cebu International Airport (MCIA) Passenger Terminal under the Philippine government’s Public Private Partnership (PPP) Program.

ADC&HAS is a global airport operator with a proven track record of successful investment, development and operation of airports around the world. It currently operates airports serving the capital cities of Quito, Ecuador and San Jose, Costa Rica with an annual capacity of over 5 million passengers and over 3.6 million passengers, respectively. It also operates airports in the growing tourist destinations of Liberia, Costa Rica and the Chungcheong Northern Province in SouthKorea.

ADC&HAS combines the operational strength and technical resources of the Houston Airport System (HAS) and the airport privatization and development experience of Airport Development Corporation (ADC). HAS operates three airports in the United States that handle an aggregate capacity of nearly 50 million passengers annually, making it North America’s fourth largest airport operator.

AEV President & CEO Erramon Aboitiz said, “By partnering with ADC&HAS, we are bringing on board one of the most dynamic developers and operators of airports in the world today. ADC&HAS has been at the forefront of airport and commercial development for over 40 years, spearheading landmark airport privatizations in Canada, Hungary, Ecuador, Costa Rica, and just recently in Korea. Coupled with the technical resources from HAS, the world’s 6th largest airport system, we’re confident that our alliance with ADC&HAS will allow us to develop a world-class airport facility in Mactan that all Filipinos will be proud of.”

Ayala President & Chief Operating Officer Fernando Zobel de Ayala, for his part, said, “We are very excited to partner with ADC&HAS in the bid for the Mactan Airport. Their experience and success in building and operating world-class airports in multiple emerging markets under a PPP concession framework make them a highly suitable partner for a project like this. We believe their expertise in airport operations together with the combined strengths of the Aboitiz and Ayala groups can offer the opportunity to significantly increase the standards of airport operations in the country. We believe that Mactan can become an even more important international gateway to southern Philippines.”

ADC&HAS President & CEO Jeffrey Schefferman noted, “We are extremely pleased to partner with Ayala and Aboitiz and are delighted at the prospect of becoming part of a very exciting future in the continued development of Cebu and the Central Visayas region. As we recognize the importance of this project for the Philippines, we were very focused and deliberate in our initial due diligence process as we wanted to ensure that our consortium brought to bear the full range and depth of experiences and the financial wherewithal required to achieve success over the long-term. We are certainly excited to move forward in this PPP process.”

The Mactan-Cebu International Airport New Passenger Terminal project is one of the PPP projects recently approved by the National Economic Development Board (NEDA). The project involves the construction of a new passenger terminal and renovation of the existing terminal. It is reportedly scheduled for bidding in the coming months.

Ayala Corporation’s consolidated net income in the first nine months of the year reached P8.7 billion, 19% higher than in the same period last year. Core net income, which excludes the impact of the accelerated depreciation from its telecom unit and revaluation gains realized at its international property unit last year, reached P9.3 billion up 31% year-on-year.

The conglomerate’s strong earnings growth was driven by robust equity earnings from its core and non-core businesses, which reached P11.1 billion in the first nine months, a 21% increase year-on-year. This was driven by its property, banking and water businesses which offset the decline in equity earnings from its telecom business. Significant improvement in equity earnings of its international businesses also helped boost equity earnings in the first nine months.

The strong earnings momentum over the past quarters has pushed share price up 49% year-to-date, outpacing the market’s 28% rise. Shares of its listed business units have likewise increased substantially over the period as they consistently delivered a solid earnings trajectory year-to-date.

REAL ESTATE

Ayala Land’s 9-month net income reached P6.6 billion, 27% higher year-on-year driven by strong revenues across all business lines. Total revenues grew by 20% to P39 billion with its property development business up 27% year-on-year on higher bookings and continued completion of projects. Its commercial leasing business grew by 19% to P6.3 billion with contribution from new malls, higher occupied office gross leasable area, and higher lease rates. Revenues from its construction and property management business surged by 40% to P14.6 billion on the back of brisk residential, office, and mall projects. In the meantime, its hotels and resorts business also rose by 11% year-on-year to P1.8 billion. Ayala Land continues to have a robust pipeline of projects for launch in the fourth quarter which includes 12,000 residential units, 117,000 square meters of shopping centers, and nearly 20,000 square meters of office GLA. It continues to position for strategic land banks within and outside Metro Manila. The company recently acquired the 74-hectare FTI property in Taguig which is strategically located near the country’s two premier business districts, the Makati CBD and Bonifacio Global City. The company’s capital expenditure this year is projected to reach a record P70 billion for both land acquisition and project completion.

BANKING

The Bank of the Philippine Island’s (BPI) 9-month net income grew by 37% to P13.2 billion. This was driven by an 18% growth in revenues as net interest income increased by 8% while non-interest income increased by 34% due to higher securities trading gains. Net interest income grew with the expansion in average asset base while net interest spreads remained relatively stable. The bank’s strong loan growth was sustained in the third quarter. Corporate and consumer loans continued their double-digit expansion, growing by 18% and 16%, respectively. Asset quality remained very healthy with net 30-day NPL ratio at 1.7%. Operating expenses increased at a very manageable rate with much of the increase arising from technology-related costs. BPI’s performance in the first nine months of the year translated to a return on equity of 19.2%.

TELECOM

Globe Telecom’s upward momentum was sustained with 9-month core net income up by 7% year-on-year to P8.8 billion. However, considering the increase in operating expenses and subsidy and the impact of the accelerated depreciation from its network modernization program, reported net income declined by 15% to P6.8 billion. Top-line growth, however, remained strong with service revenues reaching an all-time high of P61.3 billion, 6% higher than same period last year. This was driven by strong mobile, fixed line data and broadband growth which offset the decline in fixed line voice revenues. Mobile revenues rose by 6% to P49.9 billion while fixed line data and broad band revenues expanded by 9% and 14%, respectively. Total mobile subscriber base grew by 10% year-on-year breaching the 32 million mark driven by the continuous growth of both postpaid and prepaid segments. Its broadband subscribers also hit a record high of 1.6 million. Globe’s network modernization program is on track with 62% completion rate in various cell sites all over the country. Globe continues to roll-out in key areas and cover critical business districts such as Metro Davao, Metro Cebu, Quezon City and now moving in Makati City and Rockwell with target completion by November 2012. With very encouraging results, this puts Globe closer to delivering its 2012 capacity plans and network quality improvements for superior customer experience. Modernization of cell sites is accelerating through the fourth quarter of this year and is targeted to be complete by the first quarter of next year.

WATER

Manila Water Co., Inc. recorded a net income of P3.9 billion in the first nine months of the year, up 26% versus last year. Core net income, which excludes non-recurring expenses, also grew by 26% to P4.2 billion. The growth was driven by a 22% increase in revenues as a result of the steady rise in billed volume plus the timely implementation of the tariff adjustment and the contribution of new businesses outside the east zone. Its operating subsidiaries including Laguna, Boracay, Clark and Thu Duc Water in Vietnam contributed about 5% of total revenues and net income. Manila Water continues to expand operations outside the east zone. Following its recent acquisition of a 47.35% stake in Kenh Dong Water Supply Joint Stock Company in Vietnam, it recently signed a share purchase agreement to acquire 51% equity stake in Palyja, a water supply concession in Western Jakarta which serves a population of close to 6 million, nearly the size of its east zone concession in Manila. The transaction is still subject to government and regulatory approval and is expected to be closed within 180 days from its signing date last October 18, 2012.

INTERNATIONAL BUSINESSES

Ayala’s international businesses continued to improve despite lingering uncertainties in the global economy.

Its electronics business, Integrated Microelectronics, Inc. recorded a three-fold improvement in earnings in the first nine months of the year to US$5 million as revenues rose by 18% despite the weakness in developed economies as well as a slowdown in China. Revenues from its new subsidiaries in Europe and Mexico as well as contribution from another subsidiary, PSi Technologies, Inc., helped lift revenues during the period.

Its BPO unit, LiveIt, achieved continued growth and margin improvement. Share of revenues reached US$251 million, up 8% year-on-year, while share of EBITDA reached US$22 million, up 41% due to improved profitability at Stream, Integreon, and Affinity Express. As a result, LiveIt reduced its net loss, which were primarily due to acquisition related charges and other non-operating items.

Ayala Corporation Chairman and Chief Executive Officer, Mr. Jaime Augusto Zobel de Ayala, said: “We are pleased with the earnings performance of each of our core businesses and the continued improvement in profitability of our international units. Their combined performance to-date keeps us on track with our year-end targets. The positive momentum in the domestic economy continues to present opportunities for us to build on the trajectory of our core businesses and aggressively expand in these sectors. As our core businesses remain a steady source of earnings and cash flow, we also continue to optimize our portfolio to maximize value and actively invest in new sectors such as power and transport infrastructure to build a platform for long-term growth.”

Ayala parent company ended the period with gross debt of P49 billion and cash of P29 billion. After it issued a 10-billion peso 15-year corporate bond last May and placed P6.45 billion worth of treasury shares in July, the company is set to issue P8-10 billion worth of fixed rate bonds this month in preparation for significant size investments. Last October, the company acquired an additional 10.4% stake in BPI from strategic partner DBS Bank Ltd. On top of this acquisition, Ayala has deployed roughly P4 billion to date in various development projects in power generation and transport infrastructure as well as in other projects of its existing business units.

This press statement refers to the disclosure submitted to the SEC, PSE, and PDEx by Ayala chief finance officer Delfin C. Gonzalez, Jr.

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.