Ayala sees completion of $1 billion asset sale this year

MANILA, Philippines — Ayala Corp., the country’s oldest conglomerate, expects to achieve its target to raise $1 billion from the sale of non-core assets soon, according to its president and CEO Cezar “Bong” Consing.

“About three years ago, we committed to recycling about a billion dollars, and last year, we ended with already 60 percent (out of the way). I think this year, we will probably do the balance,” Consing told reporters after the listing of its preferred shares at the Philippine Stock Exchange.

He said they have several plans to recycle capital.

“It’s all kinds...basically recycling capital to where there are more immediate opportunities,” Consing said.

While he did not provide specific targets or assets, Consing noted that Ayala has been investing in sectors that are growing such as healthcare and logistics.

“It doesn’t have to be a big asset, it could be a combination of (smaller) assets,” Consing said.

Ayala has already divested some of its non-core asset divestments, such as its toll road south in Manila which was sold to Manuel B. Villar’s Prime Asset Ventures.

The Villar Group acquired the Muntinlupa-Cavite Expressway (MCX) for P3.8 billion or $72.5 million.

The sale of non-core assets is meant to recycle capital to focus on the expansion of its core business such as power, banking and telecommunications while developing healthcare and logistics.

Asked if the company is still considering selling its stake in Light Rail Manila Corp., the Ayala chief said it is still an option but it could also be put off.

“We are prepared to be opportunistic,” Consing said.

Ayala successfully raised P13.1 billion from a preferred share sale last week, selling 5.24 million preferred A shares at P2,500 per piece, comprising four million shares as base offer and 1.24 million shares to cover oversubscription.

Proceeds from the fund raising activity will be used to refinance peso-denominated obligations and partially finance the conglomerate’s capital expenditures.

Ayala has P10 billion debt due July 2023 and P4.5-billion short term debt this June.

Asked if there would be more fund-raising activities for the year for the parent firm, Ayala CFO Alberto de Larrazabal said they might raise funds for the following year.

“We might think about something toward the end of the year in preparation for next year, depending on how the market will look like. If conditions pan out then it would be interesting to go back,” he said, adding it could be bonds or bilateral loans.