Saturday, 4 April 2009

Philippines' Ayala investing P49b in ’09

By Jenniffer B. Austria
Manila Standard

Ayala Corp., the country’s oldest and largest conglomerate, is spending P49 billion in capital expenditures this year, slightly lower than P55 billion it spent in 2008.

Ayala chairman Jaime Augusto Zobel de Ayala told reporters following an annual stockholders’ meeting that the investments would enable the company to position itself when economic recovery starts.

“We expect 2009 to be a challenging year as the full impact of the global financial crisis on the real economy continues to unfold. We remain cautiously optimistic that the Philippines will remain partly insulated from the worse effect of this economic upheaval,” Zobel said.

The company is earmarking about 35 percent of capital expenditure for real estate development projects, 33 percent for telecommunications expansion and 23 percent for its water distribution system.

Property unit Ayala Land Inc. earlier said it would spend P17.4 billion in capital expenditure this year while Globe Telecom was allotting P16 billion for capital outlay.

Banking subsidiary Bank of the Philippine Islands said it would spend P2 billion in capital spending while Manila Water Services Co. Inc. earmarked P10 billion.

Ayala Corp. said funding for capital expenditures would primarily come from internal funds and borrowings.

Ayala Corp. at the end of 2008 had cash of P25 billion after raising P23 billion from the tight credit market. The company raised the amount for possible acquisition opportunities.

“All of us across the group are on the lookout for any opportunity. There will be opportunities and we are in good position to take advantage of that and we are on the lookout but that doesn’t stop us from continuously expanding across our group,” Zobel said.

Zobel did not specify the new sectors that the company is interested.

Mitsubishi Corp. of Japan, meanwhile, said it was interested in increasing its stake in Ayala-owned Integrated Microelectronics Inc. to 10 percent.

IMI president Arthur Tan said the company was in talks with Mitsubishi Corp. over the possible equity infusion in exchange for additional shares in the company.

Mitsubishi Corp. owns 1 percent of IMI, which is the electronics manufacturing subsidiary of the Ayala group.

“We want to expand our relationship with Mitsubishi Corp. They are a currently a shareholder of IMI and we are discussing the possibility of increasing their stake and help us penetrate Japan,” Tan said.

IMI is 68 percent owned by Ayala Corp. and 17 percent held by Resins Inc. The remaining shares are owned by other investors and employees of the company.

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