Ayala eyes Myanmar, Allots $1B for Power and Infrastructure

Ayala Corporation, one of the country's biggest and oldest conglomerates, is looking for investment opportunities in Myanmar while allotting $1 billion for new investments, mainly in power generation and infrastructure.

"Yes, we've sent a number of teams in Myanmar with different companies, quite a few times now," said Ayala chairman Jaime Augusto Zobel de Ayala in a press briefing after the firm's annual stockholders' meeting.

He said they are exploring opportunities in the telecommunications, real estate and banking sectors in Myanmar which recently opened up its business sector to foreign firms as long as they enter into joint ventures with local companies.

"We've sent a number of teams to Myanmar from different companies quite a few times now and we are working together with SingTel potentially to participate in a bid for the telecommunications set up of the country," Zobel said.

He explained that SingTel is taking the lead in this bid but they have opened the possibility for Ayala to enter as partner to offer its expertise. SingTel is Ayala's strategic partner in Globe Telecom.

SingTel is among the 12 international consortia that was shortlisted for the final stage of the telco license tender in Myanmar.

Zobel said his brother (Ayala president) Fernando has been to Myanmar a couple of times to get to know the country's regulatory structure.

"Myanmar is the last country in Asean to open up. It's in the process of organizing itself and opening itself up to foreign investment. The rules are not yet that clear," Ayala noted.

He said they need to get comfortable with the country since "there is interest on our part to participate in that economy. We believe the opportunities will be there, but we have to wait for the regulatory environment to define itself."

Meanwhile, Ayala corporate strategy and business development head John Eric Francia said they are allotting up to $1 billion for equity investments in projects that may be worth $6 billion in new businesses, particularly the energy and infrastructure sectors.

"The bulk of the $1 billion will be for power projects. And my estimate would be 60-70 percent of that...will be equity deployment in power between 2012-2016," Francia said.

"About $325 million has already been committed and our business development pipeline is very busy, there's a lot of opportunities, so we should use up the $700 million in the coming years," he said.

Francia said they expect to deploy about $200 million to $300 million over the next couple of years to raise their power output to about 600 megawatts.

He noted that the $1 billion will be for the equity portion corresponding to their stakes in joint ventures. Thus, including the project debt and partners' equity, these should come out to power investments of about $6 billion to $7 billion.

Property giant Ayala Land, Inc. is consolidating its business process outsourcing investments in Cebu and has sold its 60 percent interest in Asian i-Office Properties Inc. (AiO) to Cebu Property Ventures and Development Corporation.

In a disclosure to the Philippine Stock Exchange, ALI said CPVDC is 76.3 percent owned by its affiliate Cebu Holdings, Inc. This is consistent with the thrust of the CHI group to build up its recurring income base.

"This transaction will allow the company to consolidate into CPVDC the development and operations of BPO offices in Cebu and businesses related thereto," ALI chief finance officer Jaime Ysmael said.

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