San Miguel offers P20B in bonds to retire debt

|PHOTO: San Miguel Corp website

MANILA, Philippines — San Miguel Corp. has secured the go signal from the Securities and Exchange Commission (SEC) for the conglomerate’s P20-billion bond issuance set for July, representing the second and final tranche of a bond program that kicked off in 2021.

San Miguel on Tuesday said the regulator had given it the permit to sell and offer the securities, which will be issued and listed on the Philippine Dealing and Exchange Corp. on July 3.

The bonds will be composed of six-and-a-half-year Series O bonds due 2031 with a fixed initial interest rate of 7.2584 percent per year and 10-year Series P bonds due 2034 with a rate of 7.7197 percent per year.

The offer period runs from June 18 to June 24, San Miguel said in a stock exchange filing.

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

In June 2021, the SEC approved San Miguel’s P50-billion bond program under a three-year shelf registration.

Dollar-denominated debt

The diversified conglomerate led by billionaire Ramon Ang previously said proceeds from the offering would be used to retire an existing dollar-denominated debt.

The first tranche worth P30 billion was issued in July 2021, and was then considered the largest bond deal pursued by a nonbanking company in the Philippines.

Based on its final offer supplement, San Miguel said proceeds would also be used for investments in the Ninoy Aquino International Airport (Naia) rehabilitation and “other airport-related projects” in Bulacan province.

READ: SMC-led consortium bags P170-B Naia rehab project

Apart from the Naia upgrade, San Miguel is also developing the P735-billion New Manila International Airport in Bulacan.

Analysts previously said the improved Naia would complement the international Bulacan airport, thus driving revenue and cost synergies for San Miguel.

A consortium led by the conglomerate won the P170.6-billion contract to upgrade the country’s main international airport after offering the highest revenue share for the government.

New Naia terminal, bypass road

Local firms RLW Aviation Development Inc. and RMM Asian Logistics Inc., as well as Korean airport operator Incheon International Airport Corp., also form part of the consortium.

Ang vowed to build a new terminal within three years, along with a new bypass road linking Naia Expressway to Naia Terminal 3 to enhance passenger experience.

San Miguel saw its earnings in the first quarter of the year plunge by 94 percent to P509 million due to the weaker peso.

Operating income rose by 15 percent to P40.5 billion, while revenues jumped by 13 percent to P392.7 billion.

Despite lower profits and projected economic headwinds—Ang, who recently stepped down as San Miguel president to give way to his eldest son John Paul—said they were expecting continued growth this year. INQ