Saturday, 17 April 2010

Ayala Corp. plans record P70-billion expansion

Manila Bulletin

Ayala Corporation, the country’s top conglomerate, is planning to raise its capital expenditures this year by 39 percent to a record P70 billion to fund the expansion of existing businesses as well as explore new growth areas such as power and infrastructure.

In the firm’s annual stockholders’ meeting Friday, Ayala Chairman Jaime Augusto Zobel de Ayala said the capex of the group companies is the highest on record for the conglomerate.

The group’s capital expenditure plan spans investments across the real estate, telecommunications, and water utilities sectors. “We see room for growth moving forward as our businesses expand into new markets and geographies,” Zobel said.

“It is part of our long-term growth strategy to find innovative and creative ways of serving the needs of a much larger segment of our population. We are increasingly aligning our business models across the group to be responsive and relevant to our commitment to provide sustainable growth and development to a broader and more diverse community,” said Zobel.

The firm’s huge capex will be funded partly by its P30 billion cash hoard as well as by proceeds from the issuance of bonds and voting preferred shares.

Ayala shareholders approved Friday an amendment to the firm’s Articles of Incorporation creating voting preferred shares which would allow greater foreign ownership of Ayala’s common shares and further enhance liquidity.

The firm explained that its current foreign ownership level is already near the 60 percent cap and it will thus have to sell preferred shares to foreign investors to remain a Filipino corporation and not affect its investments in companies that have to be majority owned by Filipinos.

The amendment included a provision which gives Ayala flexibility to issue shares in exchange for property, such as shares of other companies, and enable the company to act quickly to value-accretive investment opportunities. “We are optimistic about this year as the economy continues to show positive signs of recovery. Ayala continues to explore new investment opportunities and platforms to enhance value creation for our shareholders,” said Ayala president Fernando Zobel de Ayala.

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