Property giant Ayala Land Inc. (ALI) is allocating P100 billion for capital expenditure this year as part of its business plan to boost net income to P40 billion by 2020 from P14.3 billion in 2013.
Jaime Ysmael, ALI senior vice president and chief finance officer, said in a text message that the planned P100-billion capital spending “is the largest so far in Ayala Land’s history.”
“This is consistent with our investment program to attain our 2020 Vision,” he said.
Ysmael said 43 percent of the 2015 capex will be spent for development projects while 32 percent will be used for land acquisition and 25 percent for investment in properties.
To partly finance the capex program, ALI has raised P16 billion in fresh funds from a top-up placement of 484.85 million shares completed on Friday. The shares were sold at P33 each, a discount from Friday’s closing level of P35 apiece.
ALI President and Chief Executive Officer Bernard Vincent Dy said: “This 16 billion-peso placement represents a landmark transaction for us as it is the single largest capital-raising exercise in the 23 years that Ayala Land has been a listed company. The funds generated will support our aggressive growth trajectory as declared in our 2020 Vision.”
Under ALI’s “2020 Vision,” the company plans to grow its net profit and revenue by 20 percent annually until 2020.
Friday’s top-up placement involved conglomerate Ayala Corp. (AC) selling the shares to investors, and later subscribing to ALI shares of the same size.
The offer was oversubscribed multiple times with strong demand from foreign investors, which cornered about 90 percent of the shares. The remaining 10 percent was bought by existing long-term shareholders.
UBS AG was the sole bookrunner of the placement, with Goldman Sachs (Asia) L.L.C. as co-lead manager, and BPI Capital Corp. as domestic co-bookrunner.
Faster growth in its recurring net income portfolio is now expected because aside from its large-scale projects, ALI also increased its stake in TriNoma operator North Triangle Depot Commercial Corp. (NTDCC) last month, bringing its majority controlling interest in the mall operator to 63.82 percent.
Last year, ALI reported a nine-month net income of P10.8 billion, up 25 percent from the same period in 2013.
ALI is the property firm of Ayala Corp., which also has units in other segments such as water utilities (Manila Water Co. Inc.), telecommunications (Globe Telecom Inc.), semiconductors (Integrated Microelectronics Inc.), banking (Bank of the Philippine Islands), and education (LiveIt Investments), among others.