Ayala Corp. to sell 3-pct stake in Globe for P4.6B
Ayala Corp. is selling roughly a 3-percent stake in Globe Telecom Inc. to Southeast Asia's largest telecommunciations company, Singapore Telecommunications Ltd. (SingTel), for P4.6 billion.
Ayala, the country's largest and most diversified conglomerate, said it would sell 3.8 million common shares in Globe at P1,210.00 each. The per share price is at a 2.1-percent premium over Globe's closing price of P1,185.00 on Thursday.
Ayala owns close to 34 percent of Globe.
The company acknowledged its strong partnership with SingTel over the years, saying "the alliance has enabled Globe to be a pioneer in digital technology and in many other mobile communications services." It said it would continue to work closely with SingTel.
The sale will increase SingTel's ownership in Globe to 47.34 percent from 44.47 percent.
Apart from the Philippines, SingTel also has major telecommunications investments in Thailand, India, Bangladesh, Indonesia and Pakistan. It has around 185 million mobile subscribers, the largest multi-market customer base in Asia outside of China.
"Our value as a holding company lies in our ability to re-allocate and turn over capital in order to start new investment cycles," said Ayala chairman and chief executive officer Jaime Augusto Zobel de Ayala.
Ayala intends to use proceeds of the planned share sale to re-invest in its business process outsourcing (BPO) businesses.
Zobel earlier said the company was banking on the BPO industry to sustain growth this year amid a slowdown in the economy.
Ayala, through unit Ayala Land Inc., has allocated P24 billion for expansion in the property sector, of which 30 percent would go to BPO projects. The company is targeting over half a million gross leasable area catering to BPO companies by 2010.
Funds to manufacturing arm
Aside from BPO, the conglomerate said it would also pour funds into its electronic manufacturing service business, Integrated Microelectronics Inc. (IMI).
IMI, which is 68-percent owned by Ayala, previously disclosed it was seeking additional capital from shareholders to support its expansion plans amid heavy losses it incurred from currency swings during the first five months.
In January to May, IMI booked $23.2 million in realized losses after it hedged its peso expenses in 2007, when the local currency was appreciating against the US dollar. It also estimated further market-to-market losses of $10.3 million arising from other hedging contracts.
"Ayala has been committed to supporting IMI's initiatives and remains excited by its growth prospects. We are prepared to subscribe to more than our proportionate share in the equity call as part of our desire to support the company in its growth initiatives irrespective of this unfortunate currency position loss," Zobel earlier said.
IMI was looking to raise over a billion pesos to fund its planned expansion in North Amercia and Europe, said Ayala's chief financial officer, Rufino Luis Manotok.
The company currently runs factories in Laguna, Cebu, Cavite and a design office in Alabang. It has five plants in China and one plant each in Singapore, US and Japan.