San Miguel to raise P15B more for infra needs
The San Miguel group plans to raise at least another P15 billion from the local debt market this semester to complete its infrastructure funding requirements for the year.
Yesterday, parent conglomerate San Miguel Corp. (SMC) listed on the Philippine Stock Exchange P30 billion worth of newly issued preferred shares. The offering was oversubscribed by two times the base offer.
SMC sold a total of 400 million preferred shares at P75 per share. The base offer consisted of 280 million preferred shares with an oversubscription option of up to 120 million shares. Eight banks arranged the offering: BDO Capital, China Bank Capital, ING, Philippine National Bank, RCBC Capital, Standard Chartered Bank and UCPB.
For this issuance, SMC’s effective cost of funds was estimated at around 6.3 percent per annum. Proceeds from the latest issuance would be used to refinance debt and for investments in various subsidiaries.
In a press briefing after the listing ceremonies yesterday, SMC chief finance officer Ferdinand Constantino said the conglomerate, through its operating companies, would raise P15 billion more from the local debt market to fund capital outlays.
He said the planned fund-raising could be in the form of preferred share or senior debt note offering. The issuer would be the operating companies and not SMC.
Proceeds would again be used to boost funding for infrastructure, power and other refinancing requirements.
The Securities and Exchange Commission, meanwhile, gave SMC authority over the shelf registration of as much as P73 billion of the preferred shares.
Shelf registration allows an issuer to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use up right away. The SEC gives the issuer a three-year window to use up the shelf registration.
SMC, which has transformed into an energy-based conglomerate from a food and beverage firm in less than a decade, expects to further evolve into an infrastructure-driven enterprise. Its infrastructure group is estimated to become a $20-billion business by 2020.
SMC president Ramon S. Ang said SMC’s share prices were now “back to normal levels.”
“I think investors are realizing that the investments we’ve made are positive, especially in Petron Corp., which spent $2.5 billion (for the oil refinery upgrade). Today, the refinery’s gross margin per barrel is doing 60 percent, the highest in the Philippine industry,” Ang said.
SMC shares closed at P77.50 per share, close to its 52-week high of P79.20 per share. It has a market capitalization of P184.33 billion.
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