SEC wants Ayalas to be transparent

The Securities and Exchange Commission said it wants the Ayala family to disclose how they intend to use the estimated P10.56- billion proceeds from the sale of their 6.9-percent stake in Ayala Corp. and to whom the shares were sold, in order to properly guide the investing public.

The move is in line with the SEC’s disclosure requirements for listed companies to ensure a level playing field.

"They need to disclose the buyers and how they plan to use the money raised from the sale of shares because it is such a huge amount. They may be thinking of acquiring something and whatever it may be should be disclosed to the public to ensure transparency," an SEC official said.

The same official noted that shares of Ayala Corp. have been on the upswing prior to the announcement of the sale (Sept. 20). On Sept. 19, 2006, Ayala’s stock closed at P477.50, 52 percent higher than the yearend 2005 closing price of P315 and the stock’s highest level in more than seven years after it closed at P494.79 on May 10, 1999.

In the disclosure it filed with securities regulators, Ayala said the shares were sold to several groups of foreign investors.

"I think it’s only fair that the Ayala Group disclose too to whom they sold the shares to quell speculations. Investors have a right to know," the SEC official said.

Analysts are speculating that the funds raised from the offering could be used for the continued expansion of the Ayala Group’s businesses.

The group is eyeing to take over cash-strapped utility firm Maynilad Water Services Inc. It has been expanding its electronics manufacturing business under its unit, Integrated Microelectronics Inc., a disk drive maker and assembler of liquid crystal display modules for mobile phones.

The Ayala conglomerate which owns the largest property developer, the number two lender by assets and second biggest mobile phone company, has been aggressively expanding abroad to continue growing.

The Ayala family, through Mermac Inc., sold around 23.84 million shares in Ayala Corp. through a special block sale at the Philippine Stock Exchange at P443 each share or a discount of 5.2 percent based on the weighted average price of the shares over the last 10 trading days.

According to the conglomerate, the sale is part of a portfolio re-arrangement exercise and is in line with efforts to increase the public float of Ayala in view of "heightened investor interest and demand for the shares."

Ayala also has interests in utilities through Manila Water Co., automotive dealerships, information technology, and international investments.

Listed on the Philippine Stock Exchange in 1976, Ayala Corp. has one of the largest market capitalizations among Philippine companies. Ayala and its other listed subsidiaries account for about a third of the Philippine composite index.