Listed conglomerates Ayala Corp. and Cebu-based Aboitiz Equity Ventures Inc. (AEV) are seeking regulatory approval for their respective P10-billion fund raising.
Through a registration statement it filed with the Securities and Exchange Commission (SEC), Ayala formalized its intent to raise P10 billion from the offering of up to 20 million preferred Class “B” shares at P500 each share.
The offer comprises preferred shares to be issued from the company’s authorized and unissued preferred class B treasury shares, pursuant to a reissuance of the shares. The shares are being offered for subscription solely in the Philippines.
The offer period was not yet disclosed, and is still subject to the approval of the SEC and the Philippine Stock Exchange (PSE).
The net proceeds from the offer, which is estimated to be P9.9 billion after deducting expenses related to the offer, will be used to partially refinance the firm’s certain peso-denominated debt obligations that fall due in the last quarter of 2013, totaling P10.25 billion.
Funding for the balance of the obligations will be sourced from internally generated funds and/or other credit facilities, Ayala further said.
Several weeks ago, the group announced through a disclosure with the PSE that it has secured approval from its board of directors regarding the share sale.
The preferred shares, which was structured as perpetual, have a call option on the 10th and 15th year.
If these shares are not redeemed on the optional redemption date, the dividend yield will be adjusted higher.
AEV bond offer
As part of its efforts to reload its working capital, Cebu-based conglomerate AEV recently filed a registration statement with the SEC to offer P10-billion worth of fixed-rate peso retail bonds.
AEV expects net proceeds amounting to approximately P9.9 billion, which will be used to fund its working capital requirements, among others.
“The net proceeds from the offer is estimated to be P9.9 billion after deducting expenses related to the offer. The balance will be used by the company to replenish working capital which was used to fund the purchase of 14.542 million shares in Union Bank amounting to P1.8 billion,” AEV said in its prospectus filed with the SEC.
The listed conglomerate will also use part of the proceeds to pay for bond issuance-related expenses, as well as to pay for its short-term obligations including short-term loans amounting to P 750 million as of June 30, 2013, among others.
Also, some of the proceeds will be used to finance the company’s planned investments and for other general corporate purposes, pursuant to its operations as a holding company.
“AEV is consistently seeking opportunities for expansion both through organic growth of its core businesses, as well as through transactions and acquisitions that would add value to the company and to the Aboitiz Group as a whole,” the group said.
Although there are no definite transactions at this time, AEV further said that it is looking at major investment opportunities that build on its established competencies, including, but not limited to the power generation and distribution, infrastructure, renewable fuels and real estate sectors.
“The company will continue to consider such opportunities to the extent that such businesses would contribute to the overall strategic objectives of the group,” it added.
First Metro Investment Corp. will serve as the issue manager and joint lead underwriter for the transaction.