AEV readies P25-B bonds to fund investments

MANILA, Philippines - Cebu-based conglomerate Aboitiz Equity Ventures Inc. (AEV) is preparing to tap the debt market in the second half of the year to raise as much as P25 billion for investments and acquisitions.

AEV said yesterday it has received board approval to issue fixed-rate retail bonds in the aggregate amount of up to P25 billion, inclusive of oversubscription.

The holding company said the bonds would be offered to the public in the second half of the year and issued in one or more tranches depending on market conditions.

“The board of directors delegated to management the final determination of the offer price, tenors, and other terms and conditions of the bonds,” AEV said.

AEV said it intends to use the proceeds of the debt sale to finance planned acquisitions, future investments and other general corporate requirements.

“The bonds will be registered under the Securities Regulation Code. AEV is also planning to list the bonds with the Philippine Dealing and Exchange Corp.,” the company said.

The amount being eyed by AEV through the bond issuance is now higher than what was earlier planned. AEV chief financial officer Stephen Paradies in an interview earlier this month said the company was only looking to borrow about P15 to P20 billion from the bond market.

AEV is currently exploring more growth opportunities in infrastructure investments which it has made the fifth leg of its business after establishing itself in power, banking, food and land development.

AEV earlier formed the consortium Trident Infrastructure and Development Corp., along with Ayala Land, SM Prime Holdings and Megaworld Corp., to bid for the P123.8-billion Laguna Lakeshore Expressway and Dike Project.

The conglomerate and partner J.V. Angeles Construction Corp. have also bagged the country’s largest private bulk water supply deal worth P10 billion in Davao.

Profit growth of the conglomerateslowed down for the past two years. Last year, its net income fell 13 percent to P18.4 billion from P21 billion in 2013.

Power remains the biggest business of the Aboitiz family as it accounted for 71 percent of the conglomerate’s total income last year, followed by banking with an 18 percent income contribution.