Ayala Corp. raises $275M via sale of common shares

Conglomerate Ayala Corp. has raised $275 million in fresh equity from the sale of common shares through a “top-up” private placement, boosting funds for the expansion of its power and infrastructure ventures.

In a statement on Thursday, AC said it had placed out 18.78 million common shares at P660 per share through this “top-up” scheme, which increased its public ownership to more than 40 percent from 38.23 percent.

Under the top-up scheme, secondary shares are sold by a principal shareholder for a faster equity transaction but the same shareholder will subscribe to the same number of shares at the same price, effectively allowing proceeds from the original private placement deal to flow into the company. In this case, holding firm Mermac Inc. initially sold its shares for a quicker deal.

“We believe the favorable market conditions present an opportune time to raise capital and provide us with ample flexibility to fund our growing investments in power and infrastructure,” Ayala chair and chief executive office Jaime Augusto Zobel de Ayala said.

“This exercise further strengthens our balance sheet for the future, allowing our portfolio to remain poised for growth and resilient to any challenges that may arise,” he added.

The placing price reflected a discount of 5.2 percent to the 30-day volume weighted average closing price of Ayala shares.

The conglomerate said it intended to use the proceeds for investments in power and infrastructure projects, among the emerging businesses of Ayala.

“Proceeds from this placement will allow Ayala to expand into business lines that will result in robust and sustainable earnings for the company. At the same time, this equity issuance further strengthens the balance sheet of the company,” said Ayala chief finance officer Delfin Gonzalez Jr.

The placement was 2.35 times oversubscribed with strong demand coming from long-only funds and a good mix of investors coming from Asia, Europe and the US, the conglomerate said.

Orders from the Philippines were likewise described as “solid” based on demand from local institutional investors.

The shares have been offered to investors outside the United States under Regulation S of the US Securities Act of 1933 and to qualified institutional buyers within the United States and have been offered in the Philippines in transactions that do not require registration under the Philippine Securities Regulation Code.

The new shares to be issued to replace those sold under this transaction are exempted from preemptive rights coverage. Ayala said that as soon as practicable, it would apply these shares —which made up 3 percent of its enlarged common stock—on the Philippine Stock Exchange.

CLSA Ltd. was the sole global coordinator while CLSA Ltd. and Credit Suisse (Singapore) Ltd. were the joint bookrunners and placement agents. BPI Capital Corp. served as domestic bookrunner and placement agent.