Ayala okays re-issue of P10-B preferred shares

MANILA, Philippines - Ayala Corp. (AC), the country’s oldest conglomerate, is returning to the capital market to raise P10 billion in fresh funds.

In a regulatory filing, AC said its board of directors approved the re-issuance and offering of up to 20 million Preferred Class B shares worth P10 billion.

“The Preferred B shares will be offered at P500 per share with a fixed quarterly dividend rate based on a 10-year PDST-R2 benchmark plus spread,” AC said.

“The shares are structured as perpetual, with a call option on the 10th and 15th year,” it added.

The call option will allow AC to buy back the preferred shares.

“Payment of current dividends shall be cumulative. The preferred shares shall be non-convertible and shall have no voting and pre-emptive rights,” AC said.

The Ayala holding firm hired BPI Capital Corp. as the issue manager and lead underwriter for the share sale.

The Preferred B shares were first issued by AC in July 2006. Five years later, the company redeemed the shares, which then were worth P5.8 billion and carried an interest rate of 9.46 percent.

AC said the preliminary registration statement covering the shares will be filed with the Securities and Exchange Commission and the application for listing will be filed with the Philippine Stock Exchange.

In June, AC opted to buy back P6 billion worth of its Preferred Class A shares well ahead of maturity. The redemption will be effective on Nov. 25, 2013.

In the first half, this year, the conglomerate’s net income hit P7.3 billion, up 20 percent from the same period last year as consolidated revenues expanded 21 percent to P74.6 billion.

AC, which was incorporated in 1968, is into real estate (Ayala Land Inc.), banking (Bank of the Philippine Islands), telecommunications (Globe Telecom, Inc.), utilities (Manila Water Co. Inc.) and electronics (Integrated Microelectronics Inc.).

For this year, AC allotted P135 billion in capital expenditures that will bankroll investment programs in the property, telecommunications and water businesses. It will also support investments in the power and transport infrastructure sectors.