Corporate News

Ayala Corp. mulling P30-B in debt securities

Posted on June 24, 2017

AYALA Corp. is firming up another sale of debt securities to bankroll its investments.

Shares in Ayala lost 1.7% to settle at P840.50 apiece on June 23.
The country’s oldest conglomerate said in a disclosure on Friday that its board of directors approved the filing of up to P30 billion worth of debt securities under shelf registration with the Securities and Exchange Commission.

The securities will be issued in one or more tranches through general public offerings.

The proposed fundraising initiative will finance general corporate purposes including funding its investments, Ayala Chief Finance Officer Jose Teodoro “TG” K. Limcaoco said in a mobile phone message.

“[There is] no set timetable yet which is precisely why we will do shelf registration as it gives us flexibility. Board approval was obtained to allow us the option to file when needed,” Mr. Limcaoco said.

Companies can use the shelf registration program to raise funds as they are needed or when market conditions become favorable to them.

Under the amended Securities Regulation Code’s rules on shelf registration, securities may be registered for sale “on a continuous or delayed basis, or in tranches, for a period not exceeding three years.”

Ayala had used up the entire P20 billion shelf registration facility that was approved by the SEC last year. The company issued the initial P10 billion in July last year and the balance in February.

The Ayala group set a P185-billion capital expenditure program this year to expand its property, telecommunications, and water businesses and ramp up operations in the power, industrial technologies, health care, and education sectors.

In a five-year plan unveiled in 2016, Ayala committed to growing its net income to P50 billion and improving to 20% the shareholder return on common equity.

The road map entailed widening the equity earnings contribution of the non-listed businesses -- AC Energy, AC Infrastructure, AC Industrials, AC Health and AC Education -- to 20%, along with that of Southeast Asian operations to 10% toward 2020.

Ayala’s earnings jumped 20% to P6.9 billion in the first quarter, anchored on a double-digit growth across its banking and real estate businesses complemented by the performance of its power and industrial technologies segment.

Shares in Ayala lost 1.7% to settle at P840.50 apiece on Friday. -- Krista Angela M. Montealegre