SMC Power plans $700-M IPO

SMC Global Power Holdings (SMC Power), one of the country’s leading power generation companies, has revived plans to debut on the Philippine Stock Exchange this year, aiming to raise as much as $700 million through an initial public offering.

Ramon S. Ang, president of SMC Power parent firm San Miguel Corp., told reporters that the company was “actively in talks with bankers and cornerstone investors” for the proposed offering.

Asked how much SMC Power would raise, he said 100 percent of the company was now valued at around $1.1 billion. “So if we sell 49 percent, we hope to raise $700 million,” he said at the sidelines of the stockholders meeting of Ginebra San Miguel Inc.

Ang said SMC Power had yet to mandate the arrangers.

The bullish stock market, especially in the aftermath of investment grade ratings from two global credit watchers, is encouraging a number of Philippine companies to go public.

At its peso equivalent of about P28.56 billion, SMC Power’s prospective IPO could be one of the largest maiden offerings in the country. The two largest IPOs (excluding follow-on offerings or re-IPOs) completed in the country were those of tycoon Henry Sy-led SM Investments Corp. and budget carrier operator Cebu Air Inc. SMIC raised P28.8 billion in 2005 and Cebu Air, P23.33 billion in 2010.

In 2011, SMC Power filed with the Securities and Exchange Commission an application to sell P13.2 billion to P35.5 billion worth of shares  through an IPO.

For this, Standard Chartered was mandated as the sole financial adviser while Goldman Sachs, Standard Chartered Securities (Singapore) Pte. and UBS were the joint bookrunners. Domestic lead underwriters were ATR KimEng Capital Partners and SB Capital Investment Corp.