Conglomerate Ayala Corp. will divest from remaining thermal energy businesses, its stake in Light Railway Transit Line 1 and other passive investments under AC Ventures, and other non-core assets by 2023 as part of a plan to raise $1 billion from asset sales.
Ayala president and chief executive Fernando Zobel de Ayala said during the annual stockholders’ meeting Friday the conglomerate would use the proceeds from the sales of assets to fund future investments, reduce debt and strengthen its balance sheet.
Ayala as of March 2022 had realized 61 percent or $614 million from the sale of assets, including partial divestment from Manila Water Co., a stake in GNPower Kauswaganthe, and secondary shares in AC Energy to Singapore’s wealth fund GIC.
The conglomerate has reinvested $360 million of the proceeds to buy back shares in the company as well as property unit Ayala Land Inc.
While Ayala is selling some of its non-core assets, it is scaling up its investments in emerging businesses, AC Health and AC Logistics Holdings Corp., in a bid to develop new revenue sources.
“We aim to establish a significant presence in healthcare and logistics, two industries that are undergoing critical transformation,” said Zobel.
He said both industries are highly fragmented, making them ripe for potential industry consolidation.
The conglomerate has allotted P12 billion to AC Health since 2015 to build a portfolio of assets in primary care and multi-specialty clinics, hospitals, retail pharmacy, pharmaceutical distribution and tele-health.
AC Health, which is currently constructing the country’s first cancer hospital, is expected to reach profitability this year and nearly P1 billion in net income by 2025.
In logistics, the group said plans to develop an end-to-end platform to serve the supply chain requirements of various industries.
Ayala in November signed an agreement to acquire a 60-percent stake in Air21 Group for P6 billion. The deal is expected to be finalized by the first half of the year.
The group is hoping that the next administration will focus on driving and accelerating the post-pandemic economic recovery by alleviating the plight of those who have been greatly affected by the pandemic and creating employment.
“We believe that regardless of who becomes the next leader, accelerating economic recovery will be made a priority, and we clearly observed this in our interactions with the candidates. Our group has always aligned its strategic priorities with the national development agenda, and we look forward to working with the next administration,” the conglomerate said.