Not a few eyebrows were raised when San Miguel Corp. announced recently the list of underwriters for the initial public offering of its energy unit, San Miguel Global Power.
No, it wasn’t the size—a substantial $500 million, estimated—or its relative youth as a corporate entity (more than compensated for by its steady cash flow).
What surprised everyone was the list of underwriters they had unveiled.
Specifically, one local firm, which many people had expected not to see doing business with San Miguel for a long time, was still there. And one foreign firm, which played a prominent role in the group’s “re-IPO” three months ago, was nowhere to be found on the list.
Specifically, this local investment bank and stockbrokerage had upset many in San Miguel for dumping the company’s shares right before and immediately after the IPO, causing a sharp drop in SMC’s share price from which it is just starting to recover.
Well, inquiries made into the affair revealed that this local investment bank/stockbroker was not selling for its own account, but was truly selling for another client (its original explanation, which few people believed then).
So who was the selling party? Said a couple of our sources: it was a foreign financial institution… who is no longer on the underwriters’ list.—Daxim L. Lucas
Sealing the SCTEx deal
The BCDA board is scheduled to meet on Wednesday to give its imprimatur to a 33-year concession deal with the Metro Pacific group covering the operations of the country’s longest tollway, the Subic-Clark-Tarlac Expressway (SCTEx).
Surmounting controversies from the bidding of the SCTEx contract (which was likewise pursued by the San Miguel group) and the renegotiation of the agreement under the new administration, the group of businessman Manuel V. Pangilinan has captured yet another potential infrastructure crown jewel.
BCDA president Arnel Casanova said the revised agreement with Metro Pacific-led Manila North Tollways Corp. was more beneficial to the government because of the revenue-sharing provisions and greater coverage of debt burden.
Based on the BCDA’s projection, the government corporation will earn something like P30 billion against the SCTEx project cost of P34 billion under the joint business and operating agreement with MVP’s group. And apart from MNTC having committed to cover the project’s debt servicing shortfall by way of advances, Casanova says the government will not guarantee any debt incurred by the private partner, thereby protecting taxpayers from any additional contingent liabilities.—Doris C. Dumlao
When titans clash
There’s nothing like a clash between conglomerates to send us salivating, and the latest conflict unfolding now is between the country’s biggest real-estate developers, Ayala Land Inc. and SM Prime Holdings of the Sy family, over the proposed location of a new mall in Bacolod City.
While the provincial government has awarded the property to ALI in a negotiated deal after a failed bidding done earlier this month, SM Prime now contends that this move is invalid.
According to SM Prime’s lawyers, the deal was “illicit” since it was sealed through a negotiated sale, despite the presence of a pending petition by the SM group for a TRO against the provincial governor and the various LGU units that approved the Ayala deal.
SM contends, of course, that it submitted a bid that was superior to ALI’s during the July 7 bidding. That process was, however, declared a failure by the provincial government as the bidders had both submitted prices that were below the appraised value of the 77,000-square-meter property.
The lawyers added that SM Prime did not participate in the negotiated transaction talks since they were required to waive their right to initiate legal action against the local government.
The SM group now contends that it “did not lose by default” contrary to the statement attributed to the provincial governor, adding that it was even compliant with the floor price requirements set under the rules of the Commission on Audit.
SM Prime proposed to purchase portions of the property at P18,885 a square meter and lease the remaining portion at P65 a square meter, or well within the price set by the awards committee. ALI, on the other hand, submitted a bid that effectively offered to purchase the property at P17,000 a square meter and a lease arrangement of P50 a square meter.
Given the stiff opposition the SM group is putting up, it looks like this issue could drag on for a while.—Daxim L. Lucas
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