However, Finance Secretary Jose T. Pardo said the amount will not go to the National Government but to a special trust account for coconut farmers.
In a compromise agreement signed recently, the National Government and San Miguel agreed to sell the sequestered 27-percent equity in SMC and deposit the proceeds in a trust account for coconut farmers.
The 27-percent equity is part of the disputed 40-percent stake in SMC that was supposedly acquired by the Marcos family using ill-gotten wealth.
The 27-percent stake was acquired using the controversial coconut levy funds which came from the contributions of coconut farmers.
The NG and SMC agreed to ask the Sandiganbayan to lift the sequestration on the said shares but the legal process may take some time and may be contested by some quarters.
Government had originally planned to sell the SMC shares, but because of the legal constraint, Pardo said they decided to go via the convertible bond offering.
Buyers of the bond will have an option to convert their investments into equity in SMC or wait for the maturity of the bonds.
Pardo said several investment houses have submitted varying proposals regarding the SMC shares. The International Finance DOF to Group (IFG) of the DOF, Pardo said, is still studying the various proposals.
If the government is successful in raising $1 billion from the planned dollar-denominated privatization bonds, Pardo said the inflow of dollars could help the peso appreciate.
The Finance Secretary said some strategic investors are expected to show interest in the bonds because of the option of converting their investment into equity in SMC. He said beer companies are likely to be interested in the bonds.
Pardo said the plan was discussed and approved by the Committee on Privatization.
In a related development, Pardo said the COP is finalizing the creation of its successor entity, the State Privatization Council, as the COP’s life is set to expire at the end of this year.