MANILA: FINANCE – Ayala investing over P200b in 2018

Ayala Corp. chief finance officer Teodoro Limcaoco said in an interview over the weekend the group’s P200-billion capital spending this year would include P20 billion to P25 billion to support the banking unit’s planned stock rights offering.

“It will be more than P200 billion for the group-wide capital expenditures. The BPI [Bank of the Philippine Islands] rights offering is considered a capex for us and we will take out proportion share,” Limcaoco said.

“BPI rights offering is about P40 [billion] to P50 billion, so if we have about 48-percent stake in the bank, that is about P20 billion to P25 billion for us,” he said.

Electronics unit  Integrated Microelectronics Inc. is also raising P5 billion through a rights offering.

Limcaoco said Ayala Corp. was also planning a peso bond offering to partially fund this year’s capital expenditures.

“We are looking at all  opportunities. We have strong support from banks, but we are also looking at the possibility of maybe a bond issue if markets are conducive,” Limcaoco said.

“I think we should be in the Philippine bond market once a year because it is good to have investors know you all the time,” he said.

Aside from BPI and IMI, other subsidiaries of Ayala Corp. are Globe Telecom, Manila Water Co. Inc., AC Energy Holdings Ltd. and AC Infrastructure Holdings Corp.

Meanwhile, Limcaoco said the final structure of the proposed merger of unit AC Education Inc. and Yuchengco-owned iPeople Inc. were still being finalized.

Limcaoco said due diligence was still ongoing and a definitive agreement could be signed within the first quarter.

The parties need to secure an approval from the Philippine Competition Commission.

Limcaoco said iPeople, a listed company, would most likely be the surviving entity. The merger would include iPeople and subsidiary Malayan Education System Inc. operating under the name of Mapua University, Malayan Colleges Laguna and Malayan Colleges Mindanao.

Ayala Corp. will put in the University of Nueva Caceres, one of the oldest and largest universities in Bicol region and Apec Schools, the largest stand-alone chain of private high schools in the country.

The merger will cover a total student population of 40,000.