San Miguel plans to take power generation business public


SMC president Ramon S. Ang AP FILE PHOTO

MANILA, Philippines — San Miguel Corp. plans to offer its power generation business to the public this 2014 and to expand its energy portfolio through more acquisitions.

The listing by introduction of SMC’s controlling stockholder Top Frontier Investment Holdings Inc., meanwhile, is expected to happen by the first or second week of January, SMC president Ramon S. Ang said in an interview on Friday.

Ang said SMC Global Power Holdings Corp. was likewise keen on pursing its initial public offering this coming year.

“It’s not a problem to raise funds because there’s a queue of potential investors. It’ more of the acquisitions that we’re looking at,” Ang said.

The Philippine Stock Exchange and the Securities and Exchange Commission have both approved the listing by way of introduction of Top Frontier, which is listing at an initial price of P178 per share.

Top Frontier will register and list on the main board of the PSE 490.196 million common shares representing 100 percent of its issued common shares. Out of these shares, SMC agreed to distribute to its common shareholders 240.196 million shares—equivalent to its 49 percent stake—as property dividend at a ratio of one Top Frontier share for every 10 SMC common shares held.

SMC said the distribution of shares in Top Frontier was intended to address cross-ownership issues.

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  • japokjackpot

    real truth? SMC needs deep war chest in order to pay its maturing obligations in 2015. the meralco sale in 2013 is just enough to pay its debts in 2014. imf warned of a conglomerate in the philippines. hope default won’t happen in 2015-2016. this will have a major domino effect. the 2014 year of the wooden horse is running fast… 2015 sheep still running but a little recovery… 2016 monkey running away with the banana 2017 rooster… sounds it’s gonna be good…

  • kapitanvic1

    I mentioned in a previous posting that the power generators must not also own stocks with meralco because meralco is a government sanctioned monopoly. Also, I wrote in another post that if this duality of ownership exist, it is a prima facie evidence that collusion existed when several power generators all failed at the same time, the main cause of the exorbitant increase in meralco’s rates.
    Remember, SMC sold all it’s shares to Gokongwei? Now we find out that SMC wants to go public with it’s ownership of one of the power generators, Top Frontier. Is this a mea culpa because SMC is about to get caught with collusion?

  • Mang Teban

    Maybe the Securities & Exchange Commission has to work doubly hard to check on cross-ownership issues which San Miguel conglomerate has taken to resolve legally by issuing property dividends from SMC common shares.

    Moreover, it is a good move from SMC to reduce its exposure in highly volatile industry as in the energy sector. Partnerships with players in this industry work well when there is mutual trust and dedication to meet expectations from both sides. Otherwise, the joint venture collapses. San Miguel Corporation is wise enough not to put all its “eggs in one basket” (the Top Frontier) which this conglomerate does not have anything to show as track record of performance..none yet.

    Yet, the government’s regulatory commission has to do its share in ensuring that issues on equity holdings and control over policy decisions by a Board that has other interests to protect will be kept at reasonable level of management discretion. Else, the stockholders of companies that will be affected by sudden change of focus by their managements can be detrimental to the shareholder’s investments.

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