SM raises $150 M in private share placement

MANILA, Philippines – The country’s largest conglomerate, SM Investments Corp., has raised $150 million from the sale of new shares via a private placement Thursday night.

SM sold 7.25 million shares at P900 per share, said Lauro Baja, managing director of UBS Philippines, which arranged the deal. Baja said on Friday morning that the deal was upsized from the original offer of $100 million.

In a disclosure to the Philippine Stock Exchange on Friday, SMIC said the shares were sold to institutional investors and the deal size was upsized due to strong investor demand.

“The proceeds of the placement will be used to refinance some of the company’s existing obligations and for general corporate purposes,” SMIC senior vice president for investor relations Cora Guidote said in the disclosure.

“The placement will also further enhance the free float and liquidity of SM shares,” Guidote added.

The deal was structured as a “top-up” placement, which means that principal shareholders lent some of their shares for a quicker fund-raising but they will afterwards buy the same shares at the same price they sold. This means that the investors were effectively buying new shares and proceeds will flow into the company.

Industry sources said book-building for the equity offer started late Thursday.

The deal was priced at the lower end of the P900-P920 per share indicative range and at a discount to SMIC’s closing price of P961.50 per share on Monday.