ALI merging with 34 subsdiaries

Real estate giant Ayala Land Inc. is absorbing through a merger 34 firms it owns directly or through wholly-owned subsidiaries AyalaLand Estates Inc. (ALEI) and AyalaLand Hotels and Resorts Corporation (AHRC) .

“The merger is an internal restructuring to simplify the ownership structure and is expected to result in operational synergies, efficient funds management and simplified reporting to government agencies,” said ALI in a disclosure to the Philippine Stock Exchange.

The firm said the Plan of Merger shall be submitted for approval of the stockholders of the companies involved in the merger during their respective annual stockholder’s meetings. 

ALI will hold its 2024 Annual Stockholders’ Meeting on April 25, 2024. The 34 subsidiaries will also hold their annual stockholders’ meetings on or before April 25, 2024. 

The Plan of Merger will then be filed with the SEC and is expected to be approved within the year.

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Based on the predetermined swap ratios, ALI will issue a total of 993.54 million ALI shares, of which 883.17 million will be Treasury Shares, 110.36 million and 11,500 ALI shares will be issued to AHRC and ALEI, respectively.

The exchange ratio is basaed on the Net Asset Values of ALI and the 34 subsidiaries.

ALI will also issue new common shares as consideration of the merger. The Company’s resulting outstanding common shares after the merger, net of treasury shares will be 15.05 billion shares from the P14.94 billion outstanding common shares before the merger.

ALI is launching P115 billion worth of projects this year with a capital expenditure (capex) budget of P100 billion as it is optimistic about opportunities for 2024.

In a recent briefing, ALI President and CEO Anna Ma. Margarita B. Dy said though that they are also “pragmatic in addressing potential challenges of a ‘higher-for-longer’ interest rate regime.”

She said ALI will be launching P100 billion worth of residential projects and P15 billion worth of commercial and industrial properties this year.

Dy said 52 percent of the residential projects will be horizontal and 48 percent vertical while 44 percent will be in Metro Manila, 38 percent in South Luzon, 7 percent in Central Luzon, and 11 percent in Visayas and Mindanao.

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Meanwhile, ALI Chief Finance Officer Augusto Bengzon said that, for the commercial leasing business, the firm will be adding 68,000 square meters of gross leasable area in new malls.

Bengzon said ALI will be increasing its capex budget this year to P100 billion from P86 billion in 2023 of which 34 percent will be for residential developments, 24 percent for estate development, 19 percent for land acquisition, 10 percent for malls, 8 percent for offices, and 5 percent for resorts.

He said the company will be raising P50 billion from borrowings from banks or the capital market of which P25 billion will be used to fund capex and the balance will be for the repayment of maturing debt.

“We will continue to grow our businesses by leaning on our premium residential brands, optimizing the leasing assets, and expanding the GLA footprint,” said Dy.

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The article was originally published in Manila Bulletin and written by James A. Loyola.

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