Corporate News

By Daphne J. Magturo, Reporter

Ayala Land buys into MCT Bhd. in first foray into Malaysia

Posted on April 07, 2015

AYALA LAND, Inc. (ALI), the country’s second largest property conglomerate by market value, said it bought a minority stake in Malaysian property developer MCT Bhd. in a P1.9-billion ($43-million) deal that would expand its footprint in Southeast Asia.

THE CITY skyline of Kuala Lumpur in Ampang is seen on Nov. 17, 2014. Ayala Land, Inc.’s purchase of a minority stake in listed property developer MCT Bhd. marks its first investment in Malaysia. The deal was valued at P1.9 billion or $43 million. -- AFP
The transaction was through a private placement coursed through ALI’s wholly owned subsidiary Regent Wise Investments Ltd., which will gain 9.16% of MCT Bhd. and a seat in the Malaysian company’s seven-member board, ALI officials told a media briefing yesterday.

In a separate disclosure to Bursa Malaysia yesterday, MCT named ALI President and Chief Executive Officer Bernard Vincent O. Dy as a non-independent, non-executive director and a member of its remuneration and nomination committees.

MCT, which began operations as Modular Construction Technology Sdn. Bhd. in 1999, yesterday debuted on the main market of Bursa Malaysia via backdoor listing after “the completion of the reverse takeover exercise of GW Plastics Holdings Berhad,” the Malaysian builder said in its web site.

“By partnering with a company such as MCT Bhd., Ayala Land will be expanding its footprint in Southeast Asia in line with its diversification goals and sets the platform for growth in Malaysia,” ALI said in a disclosure to the Philippine Stock Exchange.

“This allows Ayala Land to enter the Malaysian market with an experienced team, benefit from synergies of the partnership, and further add value to MCT over the long term to enable it to be a key player in the Malaysian real estate market.”

The deal marks Ayala Land’s first investment in Malaysia, after investing albeit on a smaller scale in Myanmar and China, although there are no plans yet if it will introduce projects there under the Ayala Land brand as “MCT has its own brand in Malaysia.”

“We feel that Malaysia is a market that shows a lot of opportunities for us to participate in,” Mr. Dy told a media briefing yesterday at Fairmont Hotel in Makati City.

“MCT is involved in the same product lines we’re in, including mid-income housing, hotel, retail, and offices.”

Pressed for further information on the partnership, Mr. Dy replied: “When you talk of opportunities, you don’t know what’s going to come down the line. We’ll evaluate if there are opportunities depending on how things turn out.”

Ayala Land continues to scout for opportunities in the Southeast Asian region, including in Vietnam and Indonesia, Ayala Land Chief Finance Officer Jaime E. Ysmael told reporters.

But Mr. Dy noted: “We’re primarily a Philippine player, we still expect a bulk of revenues to come from the Philippines.”

Also yesterday, ALI announced that the institutional book-building for its P7-billion retail bond offer is currently underway, with the issuance scheduled to run from end-April up to early May.

“We are already offering the next tranche of our retail bonds -- about P7 billion this year,” Mr. Ysmael said. “That’s the balance of the P15 billion we sought for approval last year.”

Ayala Land listed the first tranche -- P8 billion -- in April last year.

“Price setting should happen in the next two weeks, after which we will go to a one-week offer period,” he added.

The retail bonds will have a tenor of seven years and the offer’s arrangers are BPI Capital Corp., HSBC, PNB Capital, and China Banking Corp., Ayala Land Vice President and Treasurer Augusto Cesar D. Bengzon told reporters yesterday.

Mr. Ysmael said proceeds from the bond offer will be used to partly fund the company’s P100-billion capital expenditure budget this year for ongoing developments and launches of new residential and leasing projects.

Shares of the company shed 35 centavos or 0.87% to close at P39.65 apiece on Monday. -- with Reuters