MANILA, Philippines — AREIT Inc., the Ayala-led pioneering real estate investment trust (REIT), has obtained the approval of the Securities and Exchange Commission (SEC) for its planned property-for-share swap transaction with Ayala Land Inc.
The transaction involves the issuance by AREIT of 483.25 million of its primary common shares to ALI and its subsidiaries Westview Commercial Ventures Corp. and Glensworth Development Inc. at a price of P32 per share.
In exchange, ALI and its subsidiaries will assign properties in favor of AREIT valued at P15.5 billion.
With the completion of the transaction, AREIT’s gross leasable area (GLA) will be at 549,000 square meters. At the closing price of P39.80 on Oct. 8, AREIT’s total market capitalization is P60 billion compared to P27 billion during its initial public offering last year.
According to ALI’s disclosure, the assets involved in the transaction are Vertis North commercial development, Evotech Buildings 1 and 2, Bacolod Capitol Corporate Center, Ayala Northpoint Technohub and office condominium units at BPI-Philam Life Buildings in Makati and Alabang.
AREIT’s authorized capital stock will increase to P29.5 billion from P11.7 billion following the SEC’s approval.
The recognition of income from the new assets will accrue to AREIT beginning Oct. 1 instead of Nov. 1, enabling shareholders to fully benefit from the contribution of the new assets starting in the fourth quarter of the year.
In anticipation of the approval, AREIT declared its third quarter dividends last Sept.22 at P0.44 per share to stockholders of record as of Oct. 6, earlier than its regular quarterly dividend declaration to provide shareholders with an equitable share in the company’s performance for the whole third quarter, prior to the increase in its common shares in exchange for the new assets.
The new assets are expected to contribute significantly to earnings in the succeeding periods, thereby increasing the potential dividend per share for AREIT shareholders, AREIT said.
It was on March 16 when the company’s board of directors approved the increase of AREIT’s authorized capital to P29.5 billion from P11.7 billion and the subscription of ALI and its subsidiaries to 483.25 million primary common shares of AREIT in exchange for identified commercial properties.
AREIT’s outstanding common shares will increase to 1.5 billion from one billion wherein ALI will own approximately 66 percent of the total shares from 50.1 percent while adhering to the prescribed minimum public ownership requirements under Philippine laws.
The SEC also approved amendments to AREIT’s Articles of Incorporation, particularly the increase in the number of directors to eight from seven, making effective the election of Mariana Zobel de Ayala as a member of the company’s board of directors.
Mariana is the daughter of Ayala Corp. chairman Jaime Augusto Zobel de Ayala. – Iris Gonzales