SM Investment raises $150 M from sale of sharesBy Doris C. Dumlao
Philippine Daily Inquirer
MANILA, Philippines – Henry Sy’s SM Investments has raised $150 million from an overnight sale of shares to institutional investors, beefing up funds for expansion and widening its public float.
In an interview early Friday, SMIC chief finance officer Jose Sio said the placement, done via a top-up offering arranged by Macquarie Capital (Singapore) Pte. Ltd., was completed overnight.
In a subsequent disclosure to the Philippine Stock Exchange, SMIC said, “Apart from raising additional funds for the company, the top up is meant to further enhance the free float and liquidity of SM shares.”
In a top-up offering, a controlling shareholder lends some of its secondary shares for sale to new investors but it will afterwards subscribe to the same amount of primary shares to be issued by the company at the same price. By initially lending some of its shares, a quicker equity deal is possible.
“The proceeds of the placement will be used to refinance some of the company’s existing obligations and for general corporate purposes,” the disclosure said.
The board of directors of SMIC also authorized management to negotiate and finalize the terms and conditions, including pricing and any increase in issuance amount, as well as execute any and all documents necessary to implement the placement.
The pricing of the transaction is yet to be disclosed but market sources estimated the deal at about P700 per share, a discount to SMIC’s closing price of P745 per share on Thursday.
SMIC grew its first-half net profit by 13 percent year-on-year to P10.9 billion on the back of higher earnings from its banking, retailing, shopping mall and residential property businesses.
Total revenues went up by 14 percent year-on-year to P105.2 billion as all the core businesses delivered on their sales targets.
Cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 12 percent to P24.1 billion from the same period last year for an EBITDA margin of 22.8 percent. Return on equity was steady at 14 percent.
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