SEC OKs SMC’s P50-B bond offer, Cirtek’s entitlement rights sale

The Securities and Exchange Commission (SEC) has approved San Miguel Corp.’s P50-billion retail bond offering under a three-year shelf registration program.

Separately, the SEC also approved the sale of stock entitlement rights by electronics manufacturer Cirtek Holdings, which is raising fresh funds to boost working capital.

In its meeting on June 15, the SEC en banc cleared the registration statement of SMC for the issuance of fixed-rate bonds, which may be issued in one or more tranches within a period of three years.

For the first tranche, SMC will offer up to P20 billion worth of six-year fixed-rate bonds, with an oversubscription option of up to P10 billion.

Proceeds from the bond offering will be used to retire an existing dollar-denominated obligation.

Shelf registration window

SMC’s bonds will be offered at face value and listed on local fixed income trading platform, Philippine Dealing & Exchange Corp.

Under the SEC’s shelf registration window, a company can issue securities in tranches for a period not exceeding three years. Issuers can raise funds as needed or when market conditions are favorable.

SMC mandated BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., ING Bank N.V. Manila Branch, Philippine Commercial Capital Inc., PNB Capital & Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. as the joint lead underwriters and bookrunners for the transaction.

The SEC also approved Cirtek’s offering of entitlement rights to 250 million common shares alongside 250 million bonus detachable warrants and 250 million common shares underlying the bonus detachable warrant. The exercise price is P4.50 to P7.25 each.

Short-term obligations

Cirtek expects net proceeds of at least P1.1 billion up to as much as P1.79 billion from the sale. Assuming that all the bonus detachable warrants are exercised, net proceeds will reach P1.8 billion, based on an exercise price of P7.25 per share.

Unlike with regular rights offer, the existing shareholder cannot transfer the entitlement offer to anyone else.

Proceeds from the offer will be used to refinance existing debt and pay short-term obligations of subsidiary, Cirtek Electronics Corp. (CEC). The rest will be used to boost the working capital of other units, Quintel, CEC and Cirtek Advanced Technologies and Solutions Inc.

Funds raised from the exercise of the bonus detachable warrants will also be used to finance the working capital of the aforementioned subsidiaries.

The offer period will run from July 9 to July 21, based on the latest information submitted to the SEC. The shares will be listed and traded on the main board of the Philippine Stock Exchange.

Abacus Capital and Investment Corp. and PNB Capital Investment Corp. will serve as joint issue managers and lead underwriters for the offer.


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