San Miguel eyes staggered P80B preferred shares offering

CONGLOMERATE San Miguel Corp. is seeking leeway to raise as much as P80 billion from the staggered sale of a new series of preferred shares at P75 per share over a three-year period.

The first tranche will have an initial offering of P30 billion equivalent to 400 million preferred shares at a price of P75 per share.

This fund-raising program, which is seen to refinance debt and support SMC’s medium-term expansion program, seeks to utilize the shelf registration process allowed by the Securities and Exchange Commission (SEC).

The total of P80 billion issuance over a three-year period will consist of 1.066 billion preferred shares.

The filing of application at the SEC for shelf registration of these new preferred shares has been approved by SMC’s board, the conglomerate disclosed to the Philippine Stock Exchange on Friday.

Shelf registration allows an issuer to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use up right away.

Shelf registration is crucial especially in seeking a good timing to proceed with a planned securities issuance when financial markets are volatile. This allows the issuer to complete all the tedious paperwork and thereby lay the groundwork for a future issuance and immediately go to market as soon as conditions are favorable.

Under the latest implementing rules and regulations for the Securities Regulation Code approved by the Securities and Exchange Commission, the shelf registration program has been expanded. Securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years.