SMC power unit sets P35.5B IPO | Inquirer Business

SMC power unit sets P35.5B IPO

Stock offer price range: P44 to P71 a share
/ 12:06 AM August 25, 2011

DEBUT SMC Global Power Holdings will be selling as much as P35.5 billion worth of common shares in its initial public offering on the Philippine Stock Exchange.

SMC Global Power Holdings Corp., the power-generation unit of conglomerate San Miguel Corp., has firmed up its plan to debut on the Philippine Stock Exchange with an offering of as much as P35.5 billion worth of shares to the public.

In a preliminary prospectus filed at the Securities and Exchange Commission, SMC Power proposed to offer a minimum of 300 million to a maximum of 500 million common shares in a mix of primary and secondary offering at an offer price of between P44 and P71 a share.


This means that SMC Power, now one of the country’s leading power-generation companies in terms of capacity, will be selling at least P13.2 billion to as much as P35.5 billion worth of common shares.

Based on the prospectus dated August 23, Standard Chartered was mandated as the sole financial adviser for the offering while Goldman Sachs, Standard Chartered Securities (Singapore) Pte. and UBS are the joint bookrunners. Domestic lead underwriters are ATR KimEng Capital Partners and SB Capital Investment Corp.


SMC Power intends to use the net proceeds from the primary offer from the primary offer to partially finance its expansion plans and general corporate purposes. The prospectus added that the company’s operating income was sufficient to meet its payment obligations to the state-run Power Sector Asset and Liabilities Management Corp. under relevant agreements. “None of the proceeds from the primary offer will be used to pay these obligations to PSALM,” it said.

The company said it was in the “advanced” stages of planning two clean coal greenfield power projects having a combined capacity of 450 megawatts and is considering additional greenfield power projects with a total capacity of up to 3,000 MW over the next five to seven years.

“In order to continue its strategic acquisitions of existing power-generation capacity, SMC is preparing to bid for selected [National Power Corp.-owned] power-generation plants that are scheduled for privatization as asset sales or under the IPPA [independent power producers administration contracts] framework,” the prospectus said.

SMC Power also intends to pursue “vertical” integration of its power business to expand into allied businesses, citing its recent entry into coal exploration and mining. The company expects these assets to provide a source of coal supply for its new projects.

SMC Power entered the power industry in 2009 through the acquisition of power-generation assets privatized by the government. It has since then built a portfolio that now accounts for a 17.5-percent share of the national grid and 23.5 percent of the Luzon grid as of end-June this year.

As of end-2010, the company had total assets of P251.6 billion. It posted a net income of P17.4 billion last year on the back of a P66.1-billion revenue. In the first six months of this year, it chalked up P2.7 billion in net income and P35.2 billion in revenue.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Energy, IPO, Markets and Exchanges, SMC Global Power Holdings Corp.
For feedback, complaints, or inquiries, contact us.

Curated business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2022 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.