San Miguel streamlines structure, to mete out shares in Top Frontier

SMC president Ramon S. Ang: Simplify AP FILE PHOTO

MANILA, Philippines—Conglomerate San Miguel Corp. is set to distribute shares in its controlling shareholder Top Frontier Investment Holdings Inc. as a prelude to the latter’s listing on the local stock exchange by way of introduction.

By distributing shares in Top Frontier to SMC stockholders, the conglomerate seeks to simplify its ownership structure. The rationale is “to take out cross-ownership,” SMC president Ramon S. Ang said Thursday in a text message.

In a disclosure to the Philippine Stock Exchange, SMC said its board had agreed to declare as property dividends 240.196 million common shares of Top Frontier.

One common share of Top Frontier will be given for every 10 common shares of SMC held, the disclosure said.

In a subsequent disclosure, SMC said its board had approved the filing of an application with the PSE to list by way of introduction—or without any initial public offering—all the common shares of Top Frontier, including the common shares declared as property dividends.

As of end-September, Top Frontier is the lead shareholder of SMC controlling 56.6 percent of direct shares and another 9.49 percent in indirect shares lodged with Philippine Depository and Trust Corp.

Top Frontier is 49-percent owned by SMC itself as represented by Ang, and 51-percent controlled by an investor group that includes former Trade Minister Roberto V. Ongpin, Iñigo Zobel and Joselito Campos. Ang is the single biggest individual stockholder owning 15.47 percent of SMC through Privado Holdings Corp. after buying the bloc unloaded by businessman Eduardo Cojuangco Jr.

Once Top Frontier lists by way of introduction, anyone in the investor group who wants to sell can now sell, analysts said. They said this could provide the group a new listed vehicle with which to tap the capital market.

SMC shares rose by 5 percent to close at P79.80 a share at the local stock market on Thursday. It was the biggest gainer among stocks included in the local stock barometer PSEi.

“Maybe some investors are eager to participate in Top Frontier,” said Manny Cruz of Asiasec Equities.

He said SMC’s shareholder group could use the transaction for future capital-raising.

“It’s a new vehicle to offer shares to the public for future expansion program,” Cruz said.