San Miguel raising P10B via sale of debt notes

Conglomerate San Miguel Corp. has completed a P10-billion fresh fundraising through the sale of two-year debt notes to selected institutional investors.

In a disclosure to the Philippine Stock Exchange on yesterday, SMC said it had agreed to issue the two-year fixed rate corporate notes at an interest rate of 5.25 percent a year.

Proceeds will be used to refinance debt and expand businesses.

As opposed to retail bonds which require registration in the Securities and Exchange Commission because they are offered to the public, corporate notes are an easier way for corporations to raise funds as these are sold to no more than 19 qualified investors.

This debt transaction is pursuant to the authority given by SMC’s board to issue peso-denominated fixed-rate corporate notes worth of up to P20 billion, the disclosure noted.

The fixed-rate notes will be enrolled in the Philippine Dealing & Exchange Corp. on the issue date, May 25, 2018.

The group is transforming San Miguel Food and Beverage Inc. (SMFB), formerly San Miguel Pure Foods Co. Inc., into a new consumer powerhouse with the infusion of P336.35 billion worth of shares in beer and liquor businesses held by SMC.

Upon approval by the Securities and Exchange Commission of the increase in its authorized capital, SMFB will issue 4.24 million in new shares to parent conglomerate San Miguel Corp. at P79.82 per share. These shares are in exchange for SMC’s 7.86 billion common shares in San Miguel Brewery and 216.97 million common shares in Ginebra San Miguel Inc.

After the consolidation of all traditional businesses into SMFB, this unit plans to undertake a follow-on offering worth at least $1.5 billion. The upcoming equity offering is projected to bring SMFB’s market capitalization to $12 billion, SMC president Ramon S. Ang had said.