Ayala Corp., one of the country’s oldest conglomerates, is planning to raise as much as P10 billion through the sale of preferred shares in the fourth quarter to finance its expansion plans.
The company said in a filing with the Philippine Stock Exchange that its executive committee approved the reissuance and sale of 20 million preferred class “B” shares at P500 apiece.
The shares, which are nonconvertible and will have no voting or preemptive rights, will yield a fixed quarterly dividend, although the rate has yet to be finalized.
The deal, to be arranged by Ayala unit BPI Capital Corp., will likely be offered in the fourth quarter and will be used to fund capital expenditures and debt refinancing, said Ramon Opulencia, Ayala Corp. managing director and treasurer.
Based on its disclosure, Ayala Corp.’s shares will be structured as perpetual, with a call option on the 10th and 15th years. If the shares are not redeemed by the end of the 10th year, the optional redemption date, the dividend yield will be adjusted upward. The same process will be undertaken if the shares are not redeemed by the 15th year.
The conglomerate said payment of current dividends would be cumulative.
Ayala Corp. earlier obtained an exemption to cover the potential issuance of up to 100 million common shares. According to a previous filing, the exemption would cover the potential issuance of up to 100 million common shares, which the firm previously announced without committing to a timeline.
Companies usually ask for this type of exemption to give them flexibility and speed when it comes to tapping the equity market.
The company, which is involved in water distribution, property development, telecommunications and recently, power generation, is looking to expand its presence in more infrastructure projects.
It said it plans to invest up to $1 billion in power and infrastructure over a five-year period.
For energy, the conglomerate has an agreement to acquire 20 percent in GN Power Mariveles Coal Plant Ltd., a 600-megawatt coal facility in Bataan. It also has a 50-percent interest in South Luzon Thermal Energy Corp., which is building a 270-megawatt coal plant in Batangas. That project is a joint venture with Trans Asia Oil and Development Corp. Miguel R. Camus