C03296-2024

SECURITIES AND EXCHANGE COMMISSIONSEC 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 17, 2024
2. SEC Identification Number
34218
3. BIR Tax Identification No.
000-153-610-00
4. Exact name of issuer as specified in its charter
AYALA CORPORATION
5. Province, country or other jurisdiction of incorporation
PHILIPPINES
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
37F to 39F, Ayala Triangle Gardens Tower 2, Paseo de Roxas cor Makati Avenue, Makati City Postal Code 1226
8. Issuer's telephone number, including area code
(02)7908-3000
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 619,807,425
Preferred A Series 1 Shares 5,244,515
Preferred B Series 1 Shares 20,000,000
Preferred B Series 2 Shares 30,000,000
Voting Preferred Shares 200,000,000
11. Indicate the item numbers reported herein
Item 9

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 CorporationAC

PSE Disclosure Form 4-2 - Acquisition/Disposition of Shares of Another Corporation
References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Divestment of Ayala Group’s investment in Manila Water Company, Inc. (“MWC”)
Background/Description of the Disclosure

Further to the earlier disclosure regarding approval by the Executive Committee of Ayala Corporation (“AC”), AC and its wholly-owned subsidiary, Michigan Holdings, Inc. (“Michigan”) executed with Trident Water Company Holdings, Inc. (“Trident”) the underlying agreements for the special block sales covering AC’s and Michigan’s 577,997,467 MWC common shares.

Philwater Holdings Company, Inc. (“Philwater”), another wholly-owned subsidiary of AC, and Trident will also be executing a Deed of Absolute Sale for the sale of Philwater’s 872,487,863 MWC preferred shares.

The gross consideration for these transactions among AC, Michigan, and Philwater (collectively, “Ayala”), and Trident will be ~P14.5 billion.

Post-completion of these transactions, Ayala will no long hold common shares of MWC and its voting stake will be nil (0%) as a result of the block sale and voting proxy to be issued in favor of Trident vis-à-vis the participating preferred shares. However, Ayala will retain an effective 12.08% economic stake through the preferred shares which will be paid on an installment basis (details below). Once the preferred shares have been fully paid for in 2029, Ayala’s economic stake in MWC will drop to zero.
Date of Approval by
Board of Directors		 May 16, 2024
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction

The transactions are aligned with AC’s strategy to rationalize its portfolio and raise P50 billion in proceeds. With these transactions, the total proceeds raised from AC’s portfolio rationalization initiatives will be ~P51.5 billion.

The proceeds will be used to pare down debt and/or fund future investments.
Details of the acquisition or disposition
Date May 17, 2024
Manner

AC’s and Michigan’s special block sales of common shares in MWC will be through the Philippine Stock Exchange while Philwater’s sale of participating preferred shares in MWC, to Trident Water Company Holdings, Inc. will be done through the execution of a Deed of Absolute Sale.
Description of the company to be acquired or sold

MWC provides water treatment, water distribution, sewerage, and sanitation services to more than seven million people in the eastern side of Metro Manila (East Zone). The East Zone encompasses 24 cities and municipalities spanning a 1,400 square-kilometer area including key cities, towns, and municipalities in Metro Manila.
The terms and conditions of the transaction
Number of shares to be acquired or disposed 1,450,485,330
Percentage to the total outstanding shares of the company subject of the transaction 23.6
Price per share See below
Nature and amount of consideration given or received

Cash settlement through crossing broker of ~P12.9 billion (before taxes and friction costs) for the common shares and installment payments of ~P1.6 billion spread over 2024-2029 for the preferred shares for a total consideration of ~P14.5 billion.
Principle followed in determining the amount of consideration

MWC common shares were priced at P22.361/share based on a 30-day volume-weighted average price as of May 16, 2024, less a 7.2% block discount.

Preferred shares were priced on a negotiated basis at P1.844/share.
Terms of payment

Cash settlement through crossing broker of the aggregate amount of ~P12.9 billion for the common shares sold by AC and Michigan to Trident Water Company Holdings, Inc.

The purchase price of ~P1.6 billion for the preferred shares shall be paid in the following manner: annual payments from 2024 to 2029 consisting of a downpayment upon execution of the Deed of Absolute Sale and five (5) equal payments for the next five years.
Conditions precedent to closing of the transaction, if any

Approval by the Philippine Stock Exchange of the special block sales (i) between AC and Trident; and (ii) between Michigan and Trident.
Any other salient terms

None.
Identity of the person(s) from whom the shares 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
Trident Water Company Holdings, Inc. No relationship
Effect(s) on the business, financial condition and operations of the Issuer, if any

Nothing material.
Other Relevant Information

Further to the earlier disclosures on this matter, the special block sales for the 577,997,467 MWC common shares had been completed after approval by the PSE. Philwater and Trident also executed already the Deed of Absolute Sale for the sale of 872,487,863 MWC preferred shares.

Philwater issued a proxy in favor of Trident for the sold 872,487,863 MWC preferred shares.

As a result of the divestment, Messrs. Alberto M. de Larrazabal and Karl Kendrick T. Chua resigned as members of the MWC Board of Directors and the shareholders’ agreement among AC, Philwater, AC Energy and Infrastructure Corporation, and Trident was terminated.
Filed on behalf by:
Name Jose Martin Lopez
Designation Head, Investor Relations