SMC pays government for sequestered shares
MANILA, Philippines—San Miguel Corp. bought out the government’s 24 percent economic interest in the conglomerate for P57.6 billion on Friday using proceeds from a recently completed landmark capital-raising.
This exit by the government marks the end of an era in SMC, which in the past was prone to political volatility. The proceeds are expected to help fund programs benefiting the local coconut industry and farmers.
SMC announced on Friday that it had paid the Coconut Industry Investment Fund (CIIF) — the administrator of the coco levy fund —- P57.6 billion in proceeds from the redemption of its Series 1 preferred shares.
SMC chair Eduardo Cojuangco formally turned over the checks to CIIF president Jesus Arranza, who was authorized to receive the payment on behalf of the CIIF’s 14 holding companies.
“We have achieved our objective of giving to the coconut farmers and the industry the means for them to regain their competitiveness through the use of these funds,” Arranza said.
The CIIF said the amount should help the coconut industry thrive as funds would be channeled to research and development projects as well as livelihood programs for coconut farmers.
“These funds come at the most opportune time for the farmers as we have to prepare the coconut industry against competition coming from palm oil,” Arranza said. “With palm oil growing in popularity and demand, we need to create a niche for coconuts products in the higher value added segment. That way, we will be able to sustain the coconut industry for the long term, and provide better, more stable income to the farmers.”
The SMC board recently redeemed the government-owned preferred shares representing the entire CIIF block.
The P57.6 billion includes not only the proceeds from the redemption of the preferred shares but also dividends dating back to 1984.
The Supreme Court ruled that the shares and all dividends accruing to them belonged to the government and were to be used exclusively for the benefit of the coconut farmers and for the development of the coconut industry.
