JG Summit raising P30B from sale of retail bonds

MANILA, Philippines—Gokongwei-led conglomerate JG Summit Holdings Inc. is raising as much as P30 billion from the issuance of retail bonds to partly fund its investment in Manila Electric Co.

In a disclosure to the Philippine Stock Exchange on Thursday, JG Summit said it had filed a registration statement at the Securities and Exchange Commission to apply for authority to issue up to P20 billion in peso-denominated bonds with an option to upsize by another P10 billion.

BDO Capital and Investment Corp., BPI Capital Corp., First Metro Investment Corp., The Hong Kong and Shanghai Banking Corporation and Standard Chartered Bank were mandated as joint lead underwriters for the offering.

In October, JG Summit agreed to pay P72 billion for the 27-percent block held by San Miguel Corp. in Meralco, to be funded through a mix of equity and debt.

Earlier this week, the Gokongwei group also raised P8.8 billion from the sale of shares in JG Summit as part of the fund-raising for the Meralco acquisition.

In a disclosure to the PSE, the group said that 220 million shares of JG Summit were sold at P40 apiece on Nov. 25 through an equity placement. The equity deal was priced at a 4.1-percent discount to Monday’s closing price of P41.70 a share.

JG Summit shares were crossed early this week through block transactions at the local bourse. At the end of trading, JG Summit slipped by 6.83 percent, to close at P38.85 a share. It was the most actively traded stock at the local bourse for the day and the biggest lagger among companies included in the main-share PSE index.

Of the shares sold to new investors, 98.08 million consisted of treasury shares freed up by JG Summit while 121.92 million consisted of secondary shares placed out by shareholders.

“The proceeds from the offering will be used to partially fund the Meralco acquisition and for general corporate purposes,” the disclosure said.

JG Summit said the P8.8-billion fresh equity deal was likewise done “in order to widen the shareholder base of the company, and as a response to strong demand for the company’s stock.”

CLSA Limited and UBS AG acted as joint bookrunners for the transaction.