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WEDNESDAY, 18 JULY 2012 21:19 MIGUEL R. CAMUS / REPORTER
Ayala Corp. raised P6.45 billion after selling Treasury shares as it prepares funds for an aggressive $1-billion (P41.6-billion) five-year expansion budget that would see the country’s oldest conglomerate ramp up its diversification into power generation and transport infrastructure.
The fund-raising deal marks the latest in a growing trend of Philippine equity transactions as companies move to take advantage of a recent surge in their valuations to pay for their expansion plans.
Ayala Corp. said in a Philippine Stock Exchange filing on Wednesday it sold 15 million common shares held in Treasury at P430 per share, or a 6.11-percent discount. The shares are equivalent to about 2.5 percent of its expanded outstanding common stock.
“Ayala is looking to invest up to $1 billion over the next five years in the transport infrastructure and power generation sectors as it builds a portfolio of power-generation assets and as it sets its sights on toll road, rail, and airport projects under the government’s Public-Private Partnership [PPP] Program,” the company said in a statement.
Ayala Corp. closed down 5.02 percent to P435 each on heavy trading, giving it a market value of P251.14 billion on Wednesday. Even with the drop, the conglomerate is still up about 40 percent after cutting year-to-date gains of as much as 56 percent early this month.
Analysts were divided on the deal, some expressing disappointment, given the larger-than-expected discount. The investor take-up was also less than expected as an over-allotment option for another 5.18 million Treasury shares, worth P2.25 billion at current prices, was not exercised, a source said.
Bede Lovell Gomez, investment advisory deputy group head of First Metro Investment Corp., said that while the timing was less than perfect, it still benefits Ayala and investors who participated in the transaction.
“This was a quick way to raise capital. They took advantage of strong liquidity and the strong interest in the Philippines now. There is appetite for companies with a good name and Ayala has strong fundamentals,” Gomez said in a phone interview.
Last week property unit Ayala Land Inc. raised P13.6 billion in what became Asia’s biggest overnight equity placement for a real-estate company since 2005.
Ayala Corp. is expanding outside its core telecommunications, banking, real estate, water utility and manufacturing businesses.
On top of the Daang Hari–Slex Connector road, which was the first PPP project rolled out and which Ayala won in December 2011, the company expressed interest to participate in other PPP projects expected to be bid out soon.
It recently formed a strategic partnership with Metro Pacific Investment Corp., led by businessman Manuel V. Pangilinan, to jointly pursue light-rail projects in the Metro Manila area.
In the power-generation sector, Ayala Corp. has established a platform of conventional and renewable technologies and has committed around $100 million of equity on approximately 180 megawatts of gross generating capacity. It began construction of a 135-megawatt CFB thermal plant in Calaca, Batangas, in partnership with the Phinma group’s Trans Asia Oil and Development Corp.
“The company is in a phase of active investment and is eyeing to build new businesses in power and transport infrastructure. In the same manner Ayala invested in the telecom and water sector in the past, we believe the power and infrastructure sectors are critical for the country’s growth and development,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said in the statement.
While the company remains focused on the Philippines, it also continues to explore opportunities in other markets in the region. It recently acquired a 10-percent stake in Ho Chi Minh Infrastructure Investment Co., a leading player in the infrastructure sector in Vietnam. source
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