Ayala to invest up to $150M in fund management groups

this story was taken from www.inq7money.net
URL: http://money.inq7.net/topstories/view_topstories.php?yyyy=2006&mon=04&dd=08&file=3

Posted: 1:43 AM | Apr. 08, 2006

XFN-Asia

CONGLOMERATE Ayala Corp. plans to invest 100-150 million dollars in fund management groups to expand its business portfolio, and is considering paying 280 million dollars' worth of debts before they mature in 2008, senior company officials said.

Ayala Corp. has allotted about 40 billion pesos for capital spending this year, about the same amount as last year, mostly for expansions of top subsidiaries Globe Telecom Inc and Ayala Land Inc.

"At the holding company level, we continue to explore new investment opportunities that have scale and can provide a platform for expansion," Ayala Corp.'s newly elected chairman and chief executive officer Jaime Augusto Zobel de Ayala II said in a press briefing after the company's annual general meeting.

Zobel de Ayala, erstwhile president and chief executive officer, has taken over as chairman from his father Jaime, who retired on Friday after nearly 50 years in the company. His younger brother, Fernando, was elected president.

Zobel de Ayala said the conglomerate was considering venturing into the electricity and services businesses, but added that there were still no specific plans.

The government is selling its power generation and transmission businesses to raise funds and reduce its budget deficit.

Ayala Corp. will also invest 100-150 million dollars "over time" in fund management groups "which we believe have the ability to provide superior returns," Zobel de Ayala said.

Early this week, Ayala Corp. announced that it would put in up to 20 million dollars in a new fund to be managed by New York-based The Rohatyn Group.

The company also has a five-million-dollar investment in a joint venture with Temasek Group of Singapore.

"Our objective in making investments in funds and with fund managers is to seek higher returns for medium-term investments, develop alliances with global and specialized investors, and have a window to global opportunities," Zobel de Ayala said.

The Ayala group also includes Bank of the Philippine Islands, Manila Water Co., Integrated Microelectronics Inc., and Ayala Automotive Holdings Corp., among others.

Its investments in the US and Asia are held under Ayala International Pte. Ltd.

Ayala Corp. posted a highest-ever consolidated net income of 8.2 billion pesos last year, up 12 percent from 2004. On delivering even better results this year, its new chairman said: "We are cautiously optimistic... We hope to build on what we made last year. It's too early to tell, but we do feel good about the environment."

Ayala Corp. has 280 million dollars in debts that will mature in 2008, compared with an average debt maturity of 50-100 million dollars annually, its treasurer Ramon Opulencia said.

"As early as now, there are already efforts to trim that down," Opulencia said. "We can address that 2008 requirement safely."

The Ayala group ended the year with cash of 287 million dollars, enough to cover debts that will fall due this year and the next. This year, it has to repay 46 million dollars' worth of obligations.

Shareholders of Ayala Corp. on Friday approved a reclassification of 5.8 billion preferred shares with par value of 1.00 peso each into a new class of 58 million preferred "B" shares with a par value of 100.00 pesos each.

The shares, if sold at par value, will be worth 5.8 billion pesos, more than one-third of what the company needs for debt payment in 2008.

"The reclassification of these shares will give the company greater flexibility in raising capital," Opulencia said.

He said the company had yet to determine the best time to issue the stock. With INQ7.net