PROPERTY DEVELOPER Ayala Land, Inc. has moved to reduce foreign
participation in the company by restructuring its capital in light of a
stricter interpretation of equity limits.
In a disclosure, the company said its board of directors, following a
regular meeting on Monday, approved a rights offer -- consisting of
13.043 billion voting preferred shares -- "in order to comply with the
regulatory requirement on Filipino ownership following the Supreme
Court's recent ruling…".
The high court last year ordered the Securities and Exchange Commission
(SEC) to refer to a firm's voting shares in applying the
constitutionally-mandated 40% foreign ownership cap, as opposed to
outstanding capital stock that includes preferred, non-voting shares, in
a case involving Philippine Long Distance Telephone Corp. (PLDT).
Ayala Land said it did not violate the foreign equity cap even under the
stricter interpretation of the rule but preferred to give itself a wider
buffer.
"Right now, foreign-owned voting shares number 38% as of end-January and
we're targeting a 19% foreign ownership after the issuance," Ayala Land
investor communications and compliance head Pamela Ann T. Perez told
BusinessWorld.
"We're not in violation of anything but we're already very close to the
40% cap. It's always better to have leeway for foreign ownership. There
are a lot of foreign funds investing in Ayala Land. And the only reason
we're doing this is in light of the Supreme Court ruling on foreign
ownership," Ms. Perez said in a telephone interview.
The board agreed to buy back and then retire 13 billion outstanding
preferred shares, a move that will decrease Ayala Land's authorized
capital stock by P1.3 billion. The buyback -- the bulk of the shares is
owned by parent Ayala Corp. -- will be subject to shareholder approval
at firm's annual stockholders meeting on April 18, Ms. Perez said.
Ayala Land then plans to reclassify unissued preferred shares to voting
preferred shares, 13.043 billion of which will be made available via a
rights offer to common stockholders "under the same basic terms as the
outstanding preferred shares", it said without citing prices.
The Supreme Court ruling cited by Ayala Land was in response to a case
filed against index heavyweight PLDT, whose shares were reportedly in
violation of the foreign equity limits.
PLDT has similarly moved to redeem preferred shares ahead of plans to
sell 150 million new voting stocks to reduce its foreign equity level to
36% from 64%, according to previous reports. Mediaquest Holdings, Inc.,
a subsidiary of the Beneficial Trust Fund of PLDT, has a minority stake
in BusinessWorld.
Ayala Land, meanwhile, went on to disclose that its board had also
approved the issuance of P15-billion worth of corporate bonds, with
tenors of seven and 10 years. Proceeds will be used to fund part of this
year's P37-billion capital expenditure.
The company also announced the issuance of regular first semester cash
dividends worth 11 centavos per common share. The cash dividend will be
payable on March 27 to shareholders on record as of March 7.
Shares of Ayala Land plunged by 3.72% to P20.70 apiece yesterday. --
F.J.G. de la Fuente
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