Ayala Corp. dropped its plan to use the proceeds of its preferred-shares sale to augment the company’s capital spending, and will channel the money instead to its debt-servicing program.
The company earlier earmarked the proceeds to fund P4 billion worth of projects under AC Infrastructure.
Ayala will be selling 30 million class B preferred shares at P500 apiece. The offer is structured as perpetual equity securities, and will be priced based on the prevailing rate of either the five-year or the seven-year secondary-market bond rate plus a premium.
The company added a P5-billion BDO Unibank Inc. loan carrying a floating rate to the list of obligations to be paid out of the share-sale proceeds, while revising the composition of the original debts to be paid.
Among the other debts that it will pay off include the P1.46-billion loan from Metropolitan Bank and Trust Co., carrying an interest rate of 6.7 percent; various corporate notes maturing with an interest rate of 6.8 percent at P1.49 billion; and another P5-billion BDO loan carrying a floating interest rate.
At an earlier filing by Ayala, it placed the varying corporate notes at P2.82 billion with the average rate at 7.45 percent.
The preferred shares will be offered at an initial tranche of 20 million and the remaining 10 million covering the oversubscription option. Each share will be cumulative and nonvoting.
The preferred shares will also have its dividend rate reset on the fifth and 10th anniversary of its issue date.
The company earlier said it plans to spend as much as P18 billion in capital spending between this year and
the next for its list of power and infrastructure projects. For the first half of the year, it reported profits of P9.8 billion from revenues of P91.16 billion, a 34-percent increase in profit over last year, while revenues were up 22.2 percent.
The company already bagged the Light Rail Transit 1 expansion contract, together with the Metro Pacific group, and was the highest complying bidder, together with the Aboitiz group, for the Cavite-Laguna Expressway project.