Ayala Corp. sells P13 billion worth of preferred shares 

Ayala Corporation, the country’s oldest conglomerate, has raised P13.11 billion from its follow-on offering and re-issuance of Preferred Class “A” Shares (ACPAR), according to a report by Manila Bulletin.

In a disclosure to the Philippine Stock Exchange, the firm said it sold the based offer of 4 million ACPAR shares at P2,500 per share, to be reissued from the Company’s treasury shares.

As a result of the Company’s exercise of its oversubscription option in order to address the excess demands for the Shares, an additional 1.24 million shares were sold for P3.11 million.

A total of 5,244,515 ACPAR Shares will be available for listing with the PSE on May 29, 2023.

Ayala had set aside 4 million ACPAR shares for its oversubscription for a maximum offer size of P20 billion.

The preferred shares will carry an initial dividend rate of 6.3587 percent computed based on the simple average of the five-year BVAL reference rates for April 28, May 2, and May 3, 2023 plus the spread of 40 basis points.

Ayala had earlier planned to issue up to 6 million preferred shares with an oversubscription option of 4 million shares for a total offer size of P25 billion.

In its draft prospectus filed with the Securities and Exchange Commission, the firm said the net proceeds are intended to be used for refinancing certain Philippine Peso-denominated bonds and short term loans, partially funding its capital expenditures, and refinancing its callable preferred “B” shares due 2023.

But the use of proceeds disclosed was based on the original offer size of P25 billion and thus adjustments will have to be made by the company.

Ayala had said that, if net proceeds are less than the above total, Ayala will satisfy the balance of the above from internally generated funds and/or other credit facilities which may include bank borrowings, as Ayala may consider commercially favorable at the relevant time.

Proceeds will be used to refinance the P10.0 billion Fixed Rate Bond due on July 7, 2023 with an interest rate of 3.92 percent per annum which was issued in June 2016.

Approximately P3.9 billion of the net proceeds of the Preferred Shares and P3.8 billion of the net proceeds assuming the full exercise of the Oversubscription Option will be used to partially repay the P4.5 billion Short-Term Loan of the Company with Bank of the Philippine Islands. Any remaining amounts due under the BPI Loan will be paid from internally generated funds.

About P1.0 billion of the net proceeds of the Preferred Shares and P1.0 billion of the net proceeds assuming the full exercise of the Oversubscription Option will be used to fund Ayala’s equity contributions amounting P1.3 billion to its wholly owned subsidiary, AC Infra which will be used to fund AC Infra’s share in the capital calls of Light Rail Manila Corporation.

LRMC will use the proceeds to finance capital expenditures related to the construction of the LRT-1 Cavite Extension Project. The first phase of the Cavite Extension Project aims to extend LRT1 with 5 additional stations from Baclaran to Dr. Santos Avenue in Paranaque, spanning over seven kilometers.

Approximately P10.0 billion of the net proceeds of the Preferred Shares assuming the full exercise of the Oversubscription Option will be used to refinance the P10.0 billion cumulative, non-convertible, non- voting, non-participating, and redeemable Preferred “B” Shares, callable on November 15, 2023.