San Miguel’s headquarters in Mandaluyong City. —SANMIGUELBREWERY. COM
Billionaire Ramon Ang’s San Miguel Corp. (SMC) is preparing to launch an P80-billion bond sale, which would be the country’s largest corporate debt issuance to date.
SMC, a food and beverage, power and infrastructure conglomerate, said its board approved the peso-denominated bond offer, including the engagement of services by advisors and underwriters.
The deal size was for P60 billion with an oversubscription option for another P20 billion, SMC said in a stock exchange.
The mammoth offer would eclipse the previous P40 billion record achieved by SMC’s power subsidiary, SMC Global Power Holdings, last July.
SMC, which did not detail the timetable for the offer, said it would also file the required registration statement and prospectus with the Securities and Exchange Commission and the listing application with the Philippine Dealing Exchange Corp.
Eduardo Francisco, president of investment bank BDO Capital & Investment Corp., told the Inquirer last August SMC was raising money to support its big-ticket infrastructure projects.
This includes the P740-billion Bulacan airport project, dubbed the New Manila International Airport, which aims to provide an alternative gateway to the Ninoy Aquino International Airport.
The project includes sprawling economic zone that SMC said would generate annual exports worth $200 billion.
Francisco said SMC would draw a portion of the massive bond sale via a preregistration mechanism made with the Securities and Exchange Commission.
One of many
SMC joins other conglomerates and companies that were seen raising a record P400 billion in bonds for the year, to finance expansion plans during the postpandemic period, according to Reuters.
Ang earlier cited challenges in 2022 due to persistent supply issues and price increases, amplified by the Russia-Ukraine crisis.
SMC said net income from January to June sank 33 percent to P19.8 billion amid foreign exchange “movements” and normalized tax expenses from last year’s effectivity of the Corporate Recovery and Tax Incentives for Enterprises Act.
SMC’s total revenue jumped 73 percent to P711.4 billion while operating income rose 41 percent to P85.9 billion. SMC said earnings before interest, taxes, depreciation and amortization increased 13 percent to P91.2 billion.
Earnings were propelled by the strong performance of infrastructure and Petron Corp., whose first semester 2022 earnings exceeded those of the entire 2021.
The food and beverage segment also sustained revenue and profit growth while the power subsidiary saw earnings drop due to the surge in fuel input costs.