Ayala spending about P174 B for various projects

MANILA, Philippines - Ayala Corp., the country’s oldest conglomerate, expects to pour in this year the same amount of capital expenditures it allocated last year, which was roughly P174 billion.

“It will be in the same vicinity as last year,” Ayala Corp. chief finance officer TG Limcaoco said in a chance interview Wednesday night.

For the past three years, Ayala’s capex has hovered above the P170 billion mark: P187 billion in 2014, P185 billion in 2015 and P174 billion in 2016.

Paolo Borromeo, group head of corporate strategy and development also said the capex would be in the same order of magnitude as in this year’s program.

“If I remember correctly, it’s about a P160 or P180 billion across the group (last year) so roughly it would be similar for this year. Relatively, it would be the same magnitude as in previous years. The hardest part is using the money. We have sufficient cash and financing available,” Borromeo said Wednesday night.

The conglomerate is set to tap the debt market again with the issuance of P10 billion in eight-year bonds, the second tranche of a P20-billion bond program.

The listed company is targeting to issue the bonds in the first or second week of February, Limcaoco said.

According to a tentative timetable, Ayala is targeting to issue the bonds on Feb. 10 with the public offer to run from Jan. 30 to Feb. 3.  At the same time, Ayala said the timetable is subject to change, depending on market conditions and SEC’s issuance of permit to sell.

The conglomerate tapped BPI Capital Corp., China Bank Capital Corp., PNB Capital and Investment Corp., BDO Capital & Investment Corp., East West Banking Corp. and First Metro Investment Corp. as joint issue managers and joint lead underwriters.

Ayala Corp. issued the first tranche of P10 billion on July 7, 2016 in a deal that was 180 percent oversubscribed. Proceeds of the first offering, which had a rate of 3.92 percent, were used to refinance debt.

The company borrows to refinance debt and to partly fund its capital expenditures. For the P10 billion will likely be the company’s only bond issuance this year.

“The bonds should do us for the year unless there is something special that will happen within the year but we’re trying to have one regular domestic issuance once a year,” Limcaoco said.

Over the  past five years, Ayala Corp. has invested over P500 billion in capex and has provided 90,000 jobs.