SMC to buy back $259M worth of bonds

Conglomerate San Miguel Corp. has agreed to buy back $259.2 million worth of convertible bonds as part of a strategy to pare down its debt stock.

The bonds accepted by SMC for redemption after the end of a recent tender offer accounted for about 43 percent of $600 million worth of convertible bonds due in 2014. This leaves $332 million in outstanding bonds.

In a disclosure to the Philippine Stock Exchange Friday, SMC said it had agreed to repurchase the bonds at a clearing price of 107.75 percent of the principal amount. As such, SMC will shell out $280.61 million to redeem the bonds, including the payment for accrued interest.

The settlement date for the redemption of the bonds, which are listed on the Singapore Exchange Securities Trading Ltd., is set on Feb. 7.

Trading on SMC’s shares was suspended for six days when the tender offer for the convertible bonds was launched.

The $600 million in SMC convertible bonds were issued in 2011 when the company beefed up its “war chest” for acquisitions in various industries, including infrastructure, power generation, mining and telecommunications. SMC also made a significant investment in Philippine Airlines.  Doris C. Dumlao