Ayala looks to invest $1B in infra, power sectors

Posted at 07/18/12 9:55 AM

MANILA, Philippines - Conglomerate Ayala Corp. on Wednesday said it has raised P6.45 billion from the sale of 15 million treasury shares, which will be used for its investments in infrastructure and power generation sectors.

Ayala Corp. said it is looking to invest up to $1 billion in the transport infrastructure and power generation sectors in the next five years.

Ayala told the stock exchange the shares were priced at P430 per share. This was a 6% discount to Ayala's closing market price of P458 last Tuesday.

"This raised cash proceeds of P6.45 billion for Ayala which it intends to use to fund several sizable projects it is eyeing in the infrastructure and power sectors," the company said.

 The conglomerate is eyeing investments of up to $1 billion in toll road, rail and airport projects under the government's public private partnership program.

"The company is in a phase of active investment and is eyeing to build new businesses in power and transport infrastructure. In the same manner Ayala invested in the telecom and water sector in the past, we believe the power and infrastructure sectors are critical for the country’s growth and development. We hope to be able to contribute in some measure to the development of these sectors and at the same time create future sources of earnings and value for the group," Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

The company is making an aggressive push as it eyes bidding for PPP projects. Ayala Corp. has expressed interest in projects such as the NAIA Expressway, the Cavite-Laguna Expressway, and the LRT Line 1 Extension, as well as airport projects such as the Mactan Cebu International Airport.

Ayala won the government's first PPP project - the Daang Hari–SLEX Connector road project - last December.

Ayala Corp. and Metro Pacific Investment Corp. recently formed a strategic partnership to bid for Metro Manila's light rail projects.

In power generation, Ayala has made investments in conventional and renewable technologies, committing around $100 million of equity on approximately 180 megawatts of gross generating capacity.

In partnership with the Phinma group's Trans Asia Oil and Development Corp., the company has started building a 135-megawatt CFB thermal plant in Calaca, Batangas.

Ayala is also building its portfoilo of renewable energy sources in solar, wind and hydro technologies. The company said these investments would depend on the implementation of the feed-in-tariffs which the government is expected to announce in the next few months.

In the first quarter of 2012, Ayala's profit jumped 42% to P3.48 billion from P2.45 billion during the same period last year, as its property, banking and water businesses showed double-digit growth in earnings.