San Miguel considering delisting of beer subsidiary

MANILA, Philippines—San Miguel Corp. on Tuesday said it may take private its flagship beer business—one of the biggest listed firms on the local bourse—if its Japanese partner is unwilling to sell more shares for the firm to meet the minimum float requirement of the Philippine Stock Exchange.

In a briefing, SMC president Ramon S. Ang said he would meet with top executives of Kirin Brewery in Tokyo this weekend to discuss ways for San Miguel Brewery Inc. to meet the PSE’s 10-percent free float requirement that listed firms have to meet by yearend.

Ang stressed, however, that San Miguel was unwilling to further reduce its stake in the beer maker below its present ownership level of 51 percent. The Japanese beer giant holds a 48-percent stake in San Miguel Brewery, while the public holds the balance of 1 percent.

“Any sell-down of shares [to the public] would have to come from Kirin because San Miguel cannot go below its level now,” he said. “If Kirin cannot go down to 38 percent from their [level of] 48 percent, I think it will be better for us to delist.”

While optimistic about finding a solution to the free float issue, Ang said Kirin seemed hesitant to have themselves diluted because they were “very happy” with their investment in San Miguel.

Ang said he would also welcome any leeway the PSE would grant to San Miguel Brewery by way of extending the free float compliance deadline while its parent firms try to find a mutually acceptable solution to the bourse’s requirement.

Meanwhile, the firm said Tuesday that sustained efforts to increase patronage of its products and enhancements in productivity and cost management have boosted its domestic and overseas volumes in 2011 and in the first quarter of the year.

At the company’s annual stockholders’ meeting, San Miguel Brewery president Roberto N. Huang said the company retained its domestic beer market leadership at 96 percent in 2011. Its contribution to the total alcoholic beverage category also exceeded targets, reaching 67 percent in 2011.

In 2011, the company posted sales volumes of 223.8 million cases, a 1.4-percent increase from the previous year. Sales revenue grew 6.4 percent to P72 billion. Operating income rose to P20 billion, up 10.4 percent from the previous year, resulting in a 28.5-percent operating margin.