AYALA CORP. (AC) has bought back P3.19 billion worth of common shares from Mitsubishi Corp., completing the Japanese firm’s portfolio rebalancing exercise for its investments in the country’s oldest conglomerate.
In a disclosure to the stock exchange on Wednesday, the listed conglomerate said it has purchased 3.806 million of its shares held by Mitsubishi at P838 each.
“We value our relationship with Mitsubishi which remains as our second-largest shareholder. This transaction completes their portfolio rebalancing exercise with regard to their Ayala holdings, which now stands and will remain at around six percent,” AC Chief Finance Officer Jose Teodoro K. Limcaoco said in the disclosure.
Mitsubishi had earlier unloaded P11.7 billion, or about $225 million, worth of shares in AC last January, as part of the firm’s portfolio management and rebalancing of assets.
Prior to this, Mitsubishi also sold almost P8 billion worth of AC shares in March 2018, equivalent to a 1.36% stake. Mitsubishi owned 10.15% or some 63.08 million shares in AC before it started reducing its stake last year.
The transaction also forms part of AC’s share buyback program approved by the company’s board from 2007 to 2010.
“At current levels, our stock price is quite undervalued and this buyback of shares will benefit all existing shareholders,” Mr. Limcaoco said.
AC has accelerated its spending to P262 billion this year, as it gears up for the continued expansion of its property, telco, energy, infra, education, and health care units.
About half of the group’s capital expenditures will go to Ayala Land, Inc., which has committed to open more residential project, shopping centers, offices, and hotel and resort rooms moving forward.
The company has also allocated P22.6 billion at the parent level to boost its investments in AC Energy Holdings, Inc., AC Infrastructure Holdings Corp., and AC Healthcare Holdings, Inc.
While growing its existing businesses, AC has also resolved to invest $150 million into start-ups across Southeast Asia that are in the areas of data and analytics, machine learning, artificial intelligence, cloud computing, financial technology, automation, real estate, retail, transport, energy, water, health and wellness, and food.
This is in addition to the $250 million worth of funds that AC has poured in to different industries in previous years.
AC generated a net income attributable to the parent of P8.03 billion in the first quarter of 2019, driven by higher equity earnings contributions from its business units at P9.9 billion. Consolidated revenues stood at P74.34 billion, five percent higher year on year.
Shares in AC jumped 6.47% or P55 to close at P905 each at the stock exchange on Wednesday. — Arra B. Francia