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Ayala Corp eyeing bid for USD 1.8 billion infrastructure projects
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Thursday, 01 Nov 2012

Manila Standard Today reported that Ayala Corporation is preparing to bid for USD billion worth of infrastructure projects, including toll roads, railways and airports, under the so called public private partnership program of the Aquino administration.

Mr John Eric Francia MD of Ayala said in a recent presentation before clients of online brokerage company COL Financial Inc the conglomerate was interested in at least four major projects.

The projects include the USD 380 million Ninoy Aquino International Airport Expressway, the USD 470 million Cavite Laguna Expressway, the USD 700 million Light Railway Transit extensions and the USD 250 million Mactan Cebu International Airport.

In 2011, Ayala bagged the first PPP project, the four kilometer Daang Hari South Luzon Expressway connector. The conglomerate needs to raise at least USD 370 million if it succeeds in bagging the new projects, based on the 20% equity requirement.

Mr Francia said the projects would enhance the group synergies and create new sources of earnings and cash flows for the conglomerate. He said the conglomerate had a healthy cash balance to fund the projects in the next 12 to 18 months. It may also raise funds from potential assets sales and bond issuance.

Ayala earlier announced plans to issue up to PHP 10 billion worth of seven year bonds.

Mr Francia said aside from investing in power and infrastructure projects, the conglomerate was also aggressively expanding within the core businesses to fuel growth. He said the international businesses were also turning around to drive more value.

Ayala recently raised its interest in banking unit Bank of the Philippine Islands to 44% after acquiring the 10.4% stake of Singapore's DBS Group Holdings Inc for PHP 25.6 billion.

The group's property arm, Ayala Land, fully acquired the interests held by Kingdom Hotel Investments and its affiliate in Fairmont Hotel and Raffles Suites and Residences project in Makati. The deal was worth USD 24.11 million.

Meanwhile, Mr Francia said the company's new businesses, especially power and infrastructure, would account for 20% of the group's income over the coming years.

Mr Francia said the conglomerate expected capital expenditures to reach PHP 124.2 billion in 2012, up by 88% from PHP 65.9 billion in 2011. He added that "Ayala Group is well positioned to capture growth opportunities in this economic environment."

Source - Manila Standard Today


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