SMC plans to raise capital stock by over P50B

San Miguel Corp. plans to beef up its capital stock by over P50 billion based on current market prices.

In a disclosure to the Philippine Stock Exchange on Wednesday, SMC said it would seek approval from shareholders to raise its authorized capital to P30 billion from the current P22.5 billion by increasing its common shares to 3.79 billion, and by issuing a new series of preferred shares totaling 1.1 billion with a par value of P5 apiece.

Based on SMC’s closing price of P112.16 a share on Wednesday, the additional 400 million common shares that the company plans to issue may be worth P44.86 billion, although these will not necessarily be issued in a single tranche.

The authority to issue more common shares will give SMC the flexibility to sell shares for future capital-raising or use its own stock as currency, such as in funding acquisitions through a share-swap.

At a par value of P5 a share, SMC can also raise at least P5.5 billion from the issuance of preferred shares.

At the end of Wednesday’s trading session, SMC had a market capitalization of P266 billion.

The conglomerate has been diversifying from its traditional food and beverage businesses in the last few years. It has entered the power, oil, tollroad, mining, airport and telecommunications businesses. Most recently, it bought a controlling stake in flag carrier Philippine Airlines through a $500-million buy-in deal.

Malaysian banking giant CIMB recently struck a deal to buy 60 percent of SMC’s banking unit Bank of Commerce. The final agreement is expected to be signed in the next few days.—Doris C. Dumlao