Mitsubishi trims Ayala Corp stake

MANILA, Philippines — Mitsubishi Corp., Japan’s largest sogo shosha, has cut anew its stake in Ayala Corp., the country’s oldest conglomerate.

In a private placement on Tuesday night, Mitsubishi sold 13 million Ayala shares at P900 per share, raising some $224 million or P11.7 billion, according to people familiar with the matter.

Mitsubishi offered nine million shares but ended up selling 13 million shares.

“Strong demand allowed them to upsize the offer from the original announced nine million shares,” said Ayala Corp. chief finance officer Jose Teodoro “TG” Limcaoco when asked to comment.

Buyers were quality investors, a mix of local and foreign including large institutions that are familiar with the Philippines.

Shares of the company sank 5.31 percent yesterday to close at P919 per share.

In March last year, Mitsubishi, which held a 10 percent stake in Ayala at the time trimmed its stake in the conglomerate to 8.78 percent with the sale of 8.5 million shares at a discounted price of P934 apiece.

Mitsubishi has been a partner of Ayala since 1974, collaborating in various projects in the Philippines.

But the partnership is not likely to end, a representative from Mitsubishi said after the sale last March.

Representatives of Mitsubishi did not respond for comment as of press time yesterday.

In 2013, Mitsubishi also sold its 5.7 percent stake in Ayala-owned Manila Water Company Inc. for P2.8 billion to Ayala amid an arbitration issue at the time.  After the sale back then, Mitsubishi was left with a 1.2 percent stake in Manila Water.

Mitsubishi is touted as Japan’s largest trading company, with at least seven business segments such as finance, banking, energy, machinery, chemicals and food.

Ayala Corp, meanwhile, is one of the largest conglomerates in the Philippines with businesses in real estate, financial services, telecommunications, water, electronics manufacturing services, automotive, power generation, transport infrastructure, education, and healthcare.

Its corporate social responsibility arm, Ayala Foundation, has programs that focus on education, youth leadership, sustainable livelihood, and arts and culture. 

Ayala’s net income grew three percent year-on-year in January to September 2018 to 23.9 billion, supported by strong earnings growth of its real estate, telecommunications and power businesses.

However, growth was tempered by higher parent company interest expense resulting from increased borrowings to support Ayala’s capital expenditures and investments.