Ayala makes P8.07B from foreign investor

Conglomerate Ayala Corp. has raised P8.07 billion in fresh funds for expansion through a private placement of new shares with a foreign long-term institutional investor.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, the country’s oldest business house said it had issued 8.81 million new common shares at P916 apiece, reflecting a discount of 1.08 percent to the 30-day volume weighted average closing price of its shares.

The place-out also increased Ayala’s public float to 52.3 percent from 51.6 percent.

“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,” Ayala chief financial officer Teodoro Limcaoco said in the disclosure.

The firm did not identify the foreign institutional investor.

“The investment was a response to a bid by a single long-term institutional investor and an opportunistic move to further fortify our balance sheet. We have always managed our balance sheet conservatively and for the long term. In an environment of rising interest rates and global economic tensions due to trade disputes, this was the prudent thing to do,” Limcaoco explained in a text message.

Article 7 of Ayala’s charter allows the conglomerate to sell up to 100 million shares without preemptive rights or without having to offer them proportionately to existing shareholders, Limcaoco noted.

“After the recent transaction, the remaining shares are about 72 million. But we don’t expect to use any of that anytime soon,” he added.

Ayala intends to apply for the listing of the shares on the Philippine Stock Exchange.

The new shares issued to the new investor were priced a bit lower than the 1.36-percent stake unloaded by Japanese conglomerate Mitsubishi Corp. last March. Mitsubishi had sold shares in Ayala worth P7.94 billion, equivalent to 8.5 million shares priced at P934 apiece.

Ayala is one of the leading conglomerates in the country, with interests in property development, banking, telecommunications, water utility, electronics manufacturing, infrastructure, healthcare and education.

Shares of Ayala slipped by 0.94 percent to close at P951 per share following the recent transaction. As of yesterday’s close, the company was valued at around P597 billion.