THE Securities and Exchange Commission (SEC) has approved AREIT Inc.’s issuance of 441.13 million shares under a P19.48-billion asset swap with sponsor Ayala Land Inc. (ALI) and its subsidiary, Summerhill Commercial Ventures Corp.
AREIT will issue the shares at P44.15 apiece in exchange for two commercial buildings in Cebu and Pasig City with an aggregate value of P19.48 billion.
The transaction was structured as a tax-free exchange and supported by an independent fairness opinion and property appraisal.
“The infusion... is in line with the objective of AREIT and its sponsor, ALI, to grow the asset base of AREIT... to maximize value accretion for AREIT’s shareholders,” the company said in a disclosure.
The asset swap was approved by AREIT’s board last October and the shares were priced at a premium to AREIT’s 30-day volume-weighted average price of P43.93, allowing the transaction to qualify for an exemption from the Philippine Stock Exchange’s rights or public offering requirement.
AREIT said that upon completion of the transaction, assets under management would increase to P158 billion from P138 billion. The deal will expand its building portfolio to more than 1.81 million square meters of gross leasable area alongside an existing 286 hectares of industrial land.
The company said the additional commercial properties would further diversify its portfolio across key cities and real estate segments while contributing to operating cash flows.
“The properties are expected to contribute further to AREIT’s operating cash flows, boosting dividends per share,” it added.
AREIT said its portfolio has expanded significantly since its initial public offering in 2020. Before the latest infusion, it said assets had grown to P138 billion from P30 billion since its listing.
AREIT shares added P0.05, or 0.13 percent, to P37.20 each on Friday while those of Ayala Land rose P0.18, or 1.19 percent, to close at P15.30 apiece.
