Ayala raises P8.07 billion from long-term investor’s placement

AYALA CORP. (AC) raised P8.07 billion through a private placement from an institutional investor, bringing in fresh capital for the acquisition of properties or debt payment.

In a disclosure to the stock exchange on Monday, the listed conglomerate said it completed the sale of 8.81 million common shares at P916 apiece to a single long- term institutional investor.

The transaction was executed following approval from the firm’s executive committee.

The share price represents a 1.08% discount to the company’s 30-day volume weighted average closing price.

“We intend to use the proceeds to acquire properties or assets needed for the business of Ayala or for payment of debt contracted prior to the issuance of these shares,” AC said in the disclosure.

The private placement effectively hiked the company’s public float to 52.3% from 51.6%. AC said it will file an application to list the shares at the Philippine Stock Exchange (PSE) “as soon as practicable.”

Sought for comment, Philstocks Financial, Inc. Research Head Justino B. Calaycay, Jr. said the conglomerate may have chosen to raise funds through private placement to avoid the market’s current volatility.

“AC may have opted for this funding route given the prevailing conditions in the market where a public share offer may not generate

sufficient interest, particularly at the price point indicated,” Mr. Calaycay said via text.

The PSE index has fallen steeply from its peak of 9,078 last January to as low as 6,929.86 last June 26, with market participants remaining on the sidelines as trading volume averaged to only P3.4 billion last week.

Analysts however are, saying the index may be close to a reversal of this trend, as the main index has been gradually testing the 7,400 resistance in the previous week.

AC is one of the country’s oldest conglomerates, and has core businesses in property development, banking, telecom, water, power, manufacturing, and automotives.

This year, AC programmed to spend P249 billion in capital

expenditure, 44% higher than what it spent in 2017 to finance its investment program as well as real estate, telecom, and water utility units.

Its property unit, Ayala Land, Inc., ( ALI) alone will be spending a capex of P111 billion this year, as it seeks to take advantage of the strong demand for residential projects. At the same time, ALI will be launching P125 billion worth of projects this year, 25% higher than what it launched in 2017.

AC’s net income attributable to equity holders of the parent grew 10% to P7.7 billion in the first quarter of 2018, after revenues went up by 17% to P70.29 billion during the period.

Ayala shares gave up P9 or 0.94% to finish at P951 each on Monday.