Aboitiz Equity sets P10-B retail bond issue

MANILA, Philippines - Conglomerate Aboitiz Equity Ventures Inc. (AEV) is tapping the capital markets for its plan to issue long-term bonds.

In a regulatory filing, AEV said its board of directors “authorized the issuance of up to the aggregate amount of P10 billion in retail bonds with tenors of seven and 10 years.”

AEV hired First Metro Investment Corp. as issue manager for the bond sale, which is expected to be completed in the fourth quarter.

The bonds will be registered with the Securities and Exchange Commission prior to the public offering. As of end-June, AEV had no outstanding bonds.

Long-term liabilities of AEV declined 20 percent to P63.31 billion as of end-June from P78.74 billion in end-2012.

“The proceeds of the bonds issuance will be used by AEV to finance its planned investments and for other general corporate purposes,” AEV said.

AEV, which is predominantly into power generation, is looking at joining the government’s Public-Private Partnership (PPP) projects.

The government will bid out in November the P17.5-billion Mactan-Cebu International Airport project that involves the rehabilitation, expansion and operation of the facility. AEV partnered with the country’s oldest conglomerate Ayala Corp. for the bidding.

AEV, through property arm AboitizLand Inc., is also interested in the auction for the construction of the 27.5-kilometer CALA Expressway that will extend the Manila-Cavite Coastal Expressway.

In the first half this year, lower selling prices of electricity and revaluation of dollar liabilities dampened the net income of the Aboitiz family’s flagship investment firm.

AEV posted P11.9 billion in consolidated net income, up just one percent from P11.8 billion a year ago while first semester core net income grew 3.5 percent to P11.7 billion.