Ayala Corp to sell up to P5.8B in preferred shares

Ayala Corp., one of the largest conglomerates in the country, has approved the issuance of up to P5.8 billion worth of five-year preferred B shares.

In a disclosure to the Philippine Stock Exchange, Ayala said its board approved yesterday the sale of P3 billion in preferred B shares with an option to increase the offer size up to P5.8 billion.

The shares will be offered at its par value of P100 with a fixed quarterly dividend rate. If the shares are not redeemed at the end of the fifth year from date of issue, the dividend yield shall be adjusted to the higher of the original dividend yield and the 10-year FXTN benchmark, Ayala said.

The shares are non-convertible and have no voting and pre-emptive rights.

Tapped as joint issue managers and bookrunners for the issue are BPI Capital Corp. and HSBC.

Ayala has set aside P40 billion for the continued expansion of its telecommunications and business process outsourcing (BPO) businesses, as well as investments in the power generation sector and investment funds in line with efforts to ensure continued long-term growth.

As it aims to build a stronger platform for growth, the conglomerate continues to scout for opportunities that are large in scale and in sectors that can add value.

Ayala, through recently-formed subsidiary Michigan Power Inc., is also eyeing entry into the power sector through the possible acquisition of some assets of the National Power Corp. that are to be privatized.

The conglomerate is also looking at increasing opportunities in the fund management business. It recently announced its intention to invest up to $20 million in a new fund to be managed by The Rohatyn Group. It plans to invest between $100 million and $150 million over time in other management funds.

Ayala is already part of a small group together with the Temasek Group of Singapore involved in the fund management company overseeing the fund.

Ayala ended 2005 with cash of $287 million, sufficient to cover maturing debt through 2007.

Ayala owns two-thirds of the country’s biggest property firm Ayala Land, more than a third of the second-biggest lender Bank of the Philippine Islands, and 35 percent of number two phone firm Globe Telecom.