Conglomerate Ayala Corp. raised P8.07 billion from the sale of shares to an institutional investor, boosting its public float to 52.3 percent from 51.6 percent.
Ayala chief finance officer Jose Teodoro Limcaoco said in a disclosure to the stock exchange the company sold 8.81 common shares representing 1.4 percent of the conglomerate’s increased authorized capital stock at a price of P916 apiece.
The price represents a discount of 1.08 percent to the 30-day volume weighted average closing price of Ayala shares.
“We completed the placement upon its approval by our executive committee. The sale was executed through a subscription agreement for 8,810,000 shares with a single long-term institutional investor who had made a reverse inquiry,” Limcaoco said.
He said Ayala would use proceeds from the fundraising activity to acquire properties or assets or pay the debt contracted prior to the issuance of the shares.
The fundraising activity also expected to further boost the conglomerate’s balance sheet. Ayala’s cash level stood at ₱16.9 billion as of the first quarter of 2018, with net debt at ₱72 billion.
The conglomerate earlier earmarked P249 billion in capital expenditures for 2018 to support the growth initiative of core units, Ayala Land Inc., Globe Telecom Inc. and Manila Water Co. Inc. This year’s capital expenditure spending is 44 percent higher from the 2017 level.
Ayala at the parent level allotted P51.8 billion in capital spending this year primarily to fund its subscription to Bank of the Philippine Island’s stock rights offering and investments in AC Energy, AC Industrials, AC Education and AC Health.
Ayala in September last year issued $400 million in senior perpetual bonds with an annual coupon rate of 5.125 percent with no reset nor step-up, a first in the Philippines. The issuance allows Ayala to optimize its average cost of funding, extend its debt maturity profile and diversify funding source.
Ayala is on track with the medium-term goal of expanding its net income to P50 billion, improving return on equity to 15 percent, raising the equity-earnings contribution of businesses outside its four largest business units to 20 percent and widening the group’s presence in Southeast Asia to 10 percent of equity earnings by 2020.
