April 16, 2010 / 6:13 AM / 10 years ago

UPDATE 1-Philippines' Ayala Corp sees record 2010 capex

* Says to spend $1.6 bln this yr vs $1.1 bln in 2009

* Prices 7-yr peso bonds worth $225 mln at 7.2 pct

* Sees 2010 profit growing vs 2009

* Shares fall 3.7 percent, underperform main index .PSI

(Adds quotes, details)

MANILA, April 16 (Reuters) - Ayala Corp (AC.PS), the Philippines’ oldest conglomerate, said on Friday it plans record capital spending of 70 billion pesos ($1.6 billion) this year as it seeks to add power generation to its business empire.

Ayala Corp, with interests in banking, property, electronics, telecommunications, business process outsourcing, and car dealerships, has said it would bid in partnership with two other companies for a 246-megawatt hydropower plant the government is selling later this month.

The company, with a market value of nearly $3.9 billion pesos, expects its net profit this year to surpass the 8.15 billion pesos it recorded in 2009.

“We are optimistic about this year as the economy continues to show positive signs of recovery,” company president Fernando Zobel de Ayala told shareholders at an annual meeting.

Shareholders approved the reclassification of 4 million common shares to 200 million voting preferred shares which would allow more foreigners to buy into the firm, officials said.

“We’re trying to create more liquidity for foreigners to be able to come in, that’s really the main objective here,” chairman Jaime Augusto Zobel de Ayala later told reporters.

The company said the move would give it flexibility to issue shares in exchange for property and allow it to act quickly on investment opportunities.

Ayala Corp, which spent around 50 billion pesos last year for capital expenses, had a cash balance of 30.2 billion pesos at the end of 2009, allowing it to tap internal funds to partly fund this year’s record spending.

It plans to raise up to 10 billion pesos via the sale of 7-year fixed-rate bonds, an offer cleared by securities regulators this week. [ID:nMNA002698]

The company would pay interest of 7.2 percent for the bonds, said Ayala Corp treasurer Ramon Opulencia.

Proceeds would go to investment or prepayment of some debt due 2011, said Opulencia, adding there were no more plans for another debt offer for the rest of the year.

Shares of Ayala Corp fell 3.7 percent on Friday, underperforming the main index .PSI which dropped 0.4 percent, and pulled back from 2-year highs reached last week.

Despite its losses on Friday, the stock is up 13.2 percent so far this year, outpacing the 7.4 percent gain in the main index. ($1 = 44.4 pesos) (Reporting by Manolo Serapio Jr.; Writing by Rosemarie Francisco; Editing by Valerie Lee)

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