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SM Prime secures P18B through sale of shares

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SM Prime secures P18B through sale of shares

Funding for investment in Ortigas holding firm
/ 08:09 AM November 28, 2014

Property giant SM Prime Holdings Inc. has raised P18 billion from the sale of treasury shares, raising fresh equity while increasing its public float.

Part of the proceeds will be used by SMPH to fund its investment in OCLP Holdings Inc., the holding company of Ortigas & Co.

In a disclosure to the Philippine Stock Exchange yesterday, Southeast Asia’s largest property developer said it had placed out 1.06 million treasury shares at P17 each through an overnight book-building.

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The equity deal was priced at a 4.9-percent discount to Wednesday’s closing of P17.88 per share.

This transaction has released to the public nearly a fifth of its treasury-held shares, referring to shares purchased by the company using retained earnings.   Companies typically buy back shares from the open market when they think their shares are undervalued by the market. After the transaction, SMPH is left with 5.347 million of its own shares in the treasury while outstanding stocks stood at 28.879 million.

SMPH said there was strong interest from high-quality institutional investors in Asia, Europe and the United States in the equity offering.

J.P. Morgan Securities plc and Macquarie Capital Securities (Singapore) Pte. Ltd. served as joint bookrunners while BDO Capital & Investment Corp. was the domestic lead manager for the placement.

“The amount raised from the placement will partially finance the company’s capital expenditure, general corporate purposes and potential acquisitions, including the recently announced partnership in OCLP Holdings of Ortigas & Co., owners of strategic land bank and properties in key cities in Metro Manila,” the company said in the disclosure.

The SM and Ayala groups earlier ended their squabble over the Ortigas family’s OCLP Holdings, making a pact to share the boardroom and work together to develop a prime piece of property in the metropolis.

SMPH and ALI entered into a partnership with the Francisco Ortigas and Rafael Ortigas groups, two of the major voting blocks in the Ortigas family.

It was earlier reported that the SM group had offered to purchase the stake held by the group of Francisco and Fernando Ortigas equivalent to about 40 percent.

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Both SM and Ayala are drawn to OCLP by the Ortigas family’s rich land inventory in Metro Manila. Its crown jewel is the 16-hectare Greenhills shopping complex in San Juan. The Ortigas family’s other projects include the mixed-use Capitol Commons and the Tiendesitas commercial hub in Pasig.

OCLP’s current land inventory was estimated at about 50 hectares but it could add to this another 40 hectares of prime land, including portions of Camp Crame (10 hectares) and Camp Aguinaldo (30 hectares).

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TAGS: funding, Investment, Ortigas Holding Firm, SM, SM Prime, SM Prime Holdings Inc.
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