SMC plans to raise P80B from preferred share issue

Conglomerate San Miguel Corp. plans to raise as much as P80 billion from the sale of a new series of preferred shares at P75 a 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 a share.

This fund-raising program, which will refinance maturing debts of the conglomerate, seeks to tap the shelf registration process allowed by the Securities and Exchange Commission (SEC).

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

The filing of application at the SEC for the 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 when determining the best time to proceed with a planned securities issuance amid volatile financial markets.

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 turn more 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.