SMIC gets $150M from sale of shares to large investors

SM Investments Corp. raised $150 million from an overnight sale of shares to institutional investors on Thursday, beefing up its war chest for expansion and widening of its public float.

In an interview Friday, SMIC chief finance officer Jose Sio said the placement—done via a top-up offering arranged by Macquarie Capital (Singapore) Pte. Ltd.—had been completed overnight.

SMIC sold nine million shares at P700 each, SMIC investor relations chief Cora Guidote added in a text message.

This was a 6-percent discount to Thursday’s closing price of P745 per share for a total block price of P6.3 billion.

The share price of the SM group’s holding firm slid by 5.37 percent or P40 to close at P705 per share on Friday as the market adjusted to the discounted valuation.

The quick equity deal was completed overnight after the local stock market’s rebound on Thursday and also transacted after an increased index weight for SMIC at the closely watched MSCI indices.

SMIC recently obtained a 0.33 percentage weight increase in MSCI’s main Philippine index as well as a 0.50 percentage increase in the large-cap index.

In a subsequent disclosure to the Philippine Stock Exchange, SMIC said: “Apart from raising additional funds for the company, the top-up is meant to further enhance the free float and liquidity of SM shares.”

Under a top-up offering, a controlling shareholder lends some of its secondary shares for sale to new investors but it will afterwards subscribe to the same amount of primary shares to be issued by the company at the same price at a later date. By initially lending some of its shares, a quicker equity deal is possible.

“The proceeds of the placement will be used to refinance some of the company’s existing obligations and for general corporate purposes,” the disclosure said.

SMIC grew its first-half net profit by 13 percent year-on-year to P10.9 billion on the back of higher earnings from its banking, retailing, shopping mall and residential property businesses.

Total revenues went up by 14 percent year-on-year to P105.2 billion as all the core businesses delivered on their sales targets.

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