Business
Ayala Land : Acquisition or Disposition of Assets
Ayala Land : Acquisition or Disposition of
About this update from Ayala Land Inc.
SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-C CURRENT REPORT UNDER SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17.2(c) THEREUNDER 1. Date of Report (Date of earliest event reported) May 19, 2022 2. SEC Identification Number 152747 3. BIR Tax Identification No. 000-153-790-000 4. Exact name of issuer as specified in its charter Ayala Land, Inc. 5. Province, country or other jurisdiction of incorporation Makati City, Philippines 6. Industry Classification Code(SEC Use Only) 7. Address of principal office 31F Tower One and Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City Postal Code 1226 8. Issuer's telephone number, including area code +632 7908 3111 9. Former name or former address, if changed since last report N/A 10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Common Shares 14,795,594,779 Preferred Shares 130,664,494,759 11. Indicate the item numbers reported herein Item 9 - Other Matters The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party. Ayala Land, Inc. ALI PSE Disclosure Form 4-1 - Acquisition or Disposition of Assets References: SRC Rule 17 (SEC Form 17-C) and Section 4.4 of the Revised Disclosure Rules Subject of the Disclosure Property-for-Share Swap between Ayala Land, Inc. ("ALI") and AREIT, Inc. ("AREIT"). Background/Description of the Disclosure On March 9, 2022, the Executive Committee of Ayala Land, Inc., (ALI) approved the infusion of its identified key commercial properties into AREIT, Inc. (AREIT) valued at P11,257,889,535.91 under a property-for-share swap transaction wherein ALI will subscribe to 252,136,383 primary common shares of AREIT at a price of P44.65 per share, as validated by a third-party fairness opinion ("Transaction"). The Board of Directors of ALI subsequently ratified the Executive Committee's approval during its April 23, 2022 organizational meeting of the board of directors On May 19, 2022, AREIT and ALI executed the Deed of Exchange in implementation of the Transaction Date of Approval by Board of Directors Mar 9, 2022 Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction The infusion of the commercial assets is part of ALI's commitment as AREIT's Sponsor to support AREIT's growth plans of building a larger and more diversified portfolio. The Transaction will increase ALI's ownership in AREIT from 60.32% to 66%. Details of the acquisition or disposition Date May 19, 2022 Description of the Transaction Asset Disposition Manner Property-for-share swap Description of the assets involved eBloc 1 - 20,842 sq. meters of gross leasable space completed in 2009. A grade A, PEZA-accredited building with overall occupancy of 96%. eBloc 2 - 27,727 sq. meters of gross leasable space completed in 2011. A grade A, PEZA-accredited building with overall occupancy of 98%. eBloc 3 - 15,233 sq. meters of gross leasable space completed in 2014. A grade A, PEZA-accredited building with overall occupancy of 97%. eBloc 4 - 16,167 sq. meters of gross leasable space completed in 2015. A grade A, PEZA-accredited building with overall occupancy of 99%. ACC Tower - 27,517 sq. meters of gross leasable space completed in 2016. A grade A, PEZA-accredited building with overall occupancy of 97%. Tech Tower 1 - 16,813 sq. meters of gross leasable space completed in 2018. A grade A, PEZA-accredited building with overall occupancy of 91%. Terms and conditions of the transaction Nature and amount of consideration given or received Properties valued at Php11,257,889,535.91 in exchange for 252,136,383 common shares ("AREIT shares") at an exchange price of Php44.65, which are all within the price range indicated in the Fairness Opinion issued by Isla Lipana Co., and the Appraisal Reports issued by Asian Appraisal Company, Inc. Principle followed in determining the amount of consideration The assets were valued using the Discounted Cashflows ("DCF") Approach as the primary method to estimate the fair value of the AREIT shares and the Properties. Under the DCF approach, Isla Lipana discounted the cashflows of AREIT and the Properties based on a weighted average cost of capital (WACC) using the Capital Asset Pricing Model. The Comparable Companies Approach and Precedent Transactions Approach were used as secondary methods to cross-check the value of the AREIT shares. The Direct Capitalization Approach was used to cross-check the value of the Properties. Terms of payment The shares shall be issued in the name of ALI and the Properties transferred to AREIT upon approval of the Securities and Exchange Commission of the subscription of ALI of AREIT shares in exchange for the Properties. Conditions precedent to closing of the transaction, if any Approval of the Securities and Exchange Commission of the subscription of ALI of AREIT shares in exchange for the Properties. Any other salient terms The property-for-share swap will qualify as a tax-free exchange under Section 40(C)(2) of the Tax Code. The Company shall likewise apply for the additional listing of the shares resulting from the Transaction with the PSE. The majority vote representing the outstanding shares held by the minority stockholders present and represented in the special stockholders' meeting of AREIT last April 21, 2022 was likewise obtained for the issuance of the waiver of the requirement to conduct a rights or public offering of the shares to be subscribed by ALI as part of the requirements of the PSE. Identity of the person(s) from whom the assets were acquired or to whom they were sold Name Nature of any material relationship with the Issuer, their directors/ officers, or any of their affiliates AREIT, Inc. Subsidiary; ALI, the Sponsor, owns 60.32% (directly and indirectly) of AREIT, Inc. Effect(s) on the business, financial condition and operations of the Issuer, if any The transaction will increase Ayala Land's shareholdings in AREIT, Inc. from 60.32% to 66%. Other Relevant Information AREIT shall seek approval of the SEC on the subscription of ALI of shares in exchange for the Properties to be transferred to AREIT. Upon approval of the SEC of the property-for-share swap between AREIT and ALI, the Parties shall apply for the Certificate Authorizing Registration with the BIR, and the listing of the additional shares with the Philippine Stock Exchange, within the year. If the transaction being reported is an acquisition, kindly submit the following additional information: Source(s) of funds N/A If any asset so acquired by the issuer or its subsidiaries constituted plant, equipment or other physical property, state the nature of the business in which the assets were used by the persons from whom acquired and whether the issuer intends to continue such use or intends to devote the assets to other purposes, indicating such other purposes N/A Filed on behalf by: Name Michael Blase Aquilizan Designation Manager