Aboitiz Equity seeks to raise P5 billion to pay old debts

MANILA, Philippines — Aboitiz Equity Ventures Inc. (AEV) announced Tuesday a plan to raise P5 billion through a new round of retail bonds sale to repay company debts falling due soon.

In a disclosure to the stock exchange, the holding firm of the Aboitiz Group said corporate regulators were asked to allow the company to float bonds anew, following its foray to the debt market in June last year.

The bond issuances form part of the P30-billion debt program approved by the Securities and Exchange Commission for the holding firm.

The fixed-rate debt papers have an oversubscription option of up to P5 billion, meaning Aboitiz may opt to double its original offer, and will be sold to retail investors in the fourth quarter of this year, "or at a later date, subject to market conditions."

"AEV intends to use the proceeds from the Second Tranche Bonds to partially refinance maturing obligations from its previously issued bonds," the company said.

Shares in AEV slipped 1.80% to close at P46.50 apiece on Tuesday, tracking a broader decline in the main index.

AEV sold P5 billion from the P30-billion shelf the company secured from regulators in June last year. But with the coronavirus pandemic hammering the economy, AEV is joining other local corporations in tapping the debt market to meet the company's growing needs during hard times.

The impact of the health crisis can be gleaned on the company's balance sheet. In the first half, AEV's net income crashed 55% on-year to P4 billion after its infrastructure and real estate businesses both swung to a net loss during the period while its power and banking units posted lower earnings. 

For the second tranche of bond issuance, AEV hired BDO Capital & Investment Corp. and First Metro Investment Corp. as joint issue managers, as well as BDO Capital & Investment Corp., BPI Capital Corp., First Metro Investment Corp., China Bank Capital Corp., and SB Capital Investment Corp. as joint lead underwriters.