Zobel-led Ayala Corporation, the country’s oldest conglomerate, has raised P2.21 billion from the sale of treasury common shares on top of its planned P15 billion preferred share offering.

The firm disclosed to the Philippine Stock Exchange, that it sold 3.07 million treasury common shares through a block sale at P720 per share after being authorized by the Executive Committee on September 26, 2024.

Ayala is also raising P15 billion from the planned follow-on offering of Preferred B shares approved by the PSE on Sept. 25, 2024. The offering period will be from Oct. 1 to Oct 7, 2024 with tentative listing date on Oct. 15, 2024.

It has also set the initial dividend rate at 6.0538 percent per annum computed based on the three-day simple average of the 5-Year PHP BVAL reference rate plus a spread of 40 basis points.

Ayala’s offer and re-issuance of Preferred “B” Shares consist of a base amount of P10.0 billion of five million shares with an oversubscription option of up to P5.0 billion or 2.5 million shares at P2,000 per share.

Ayala is looking to offer to the public an initial five million preferred B shares and another 2.5 million shares to cover the oversubscription option at an offer price of P2,000 per share.

Proceeds of the offering will be used by Ayala to redeem what is left of the original Class B preferred shares the company issued that is due to be called by November 29.

The company has tapped BPI Capital Corporation as sole issue manager who will be joined by BDO Capital & Investment Corporation, China Bank Capital Corporation, PNB Capital and Investment Corporation, RCBC Capital Corporation, and SB Capital Investment Corporation as joint lead underwriters and bookrunners.

The cumulative, non-convertible, non-participating, non-voting, redeemable, and perpetual peso-denominated perpetual preferred B shares will have a dividend rate step up on the fifth year after its issuance, if not redeemed. Ayala reserves the right to redeem the shares every dividend payment date after that.

The conglomerate is raising its capital expenditure budget by 14 percent to P284 billion this year from P249 billion in 2023 as it is confident of surpassing last year’s record financial performance.

Ayala President and CEO Cezar P. Consing said “2023 was a reasonably good year for us in aggregate. That's our new high watermark in terms of net income. It exceeded pre-COVID. It was up on the year before.”

“This year, that momentum, at least what we're seeing right now, is pretty good. And we're seeing it more evenly distributed across our many businesses… This year, I think you're going to see more of our businesses begin to show real positive events.”

Ayala Chief Finance Officer Alberto M. de Larrazabal said the bulk of this year’s capex will be spent for the expansion of Ayala Land Inc. and ACEN Corporation.

ALI raised its capex budget by 14 percent to P100 billion this year while ACEN has increased its allotment by about 40 percent to P72 billion.

On the other hand, other subsidiaries are reducing their capex, particularly Globe Telecom which has budgeted P55 billion, a five-year low as it has already scaled up its facilities in recent years.

For the parent company, including funding for the group’s portfolio investments, Ayala has allotted capital expenditures of P13 billion for 2023.