Ayala Land Inc. (ALI) has raised P3.16 billion in fresh capital from the sale of Ayala Real Estate Investment Trust (AREIT) shares that it now intends to use for new property projects.
The funds generation reflected the success of the REIT program but it was also a necessity to keep with the minimum 33 percent public ownership level required of REIT issues.
ALI said the proceeds from the sale of the AREIT shares will be used to fund ongoing and future investments in real estate properties in Metro Manila, Laguna, Pampanga, Tarlac and Cebu.
It will embark on the projects either alone or through other subsidiaries and affiliates.
In a report to the stock exchange, the giant developer said the transfer of funding from ALI to its units may be through a capital infusion or through shareholder financing.
Property-for-share swap
The recent transaction involved the sale of 98 million AREIT shares of ALI and WCVC at a transaction price of P32.
On 21 May, ALI and WCVC executed a block sale of the AREIT shares in preparation for the property-for-share swap among ALI and its subsidiaries, Greenhaven Property Ventures Inc. (Greenhaven), Cebu Insular Hotel Co. Inc. (Cebu Insular), Buendia Christiana Holdings Corp. and AREIT.
Under the property-for-share swap, AREIT issued 841,259,412 primary common shares of stock to ALI and its units at P34 per share in exchange for four commercial buildings located in Ayala Center Makati and Ayala Center Cebu, and a 276-hectare parcel of industrial land located in Zambales, with an aggregate value of P28.6 billion. The stocks will be issued from AREIT’s unissued shares.
The property-for-share swap is intended to be completed by the third quarter of 2024 after the scheme received AREIT stockholders approval on 12 February.