SMC seeks coal, oil ventures abroad

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. is on the hunt for oil, gas and coal assets overseas to further boost growth outside of its core brewing, food and packaging business, a top company executive said.

San Miguel president Ramon Ang said the company is looking at acquiring prospective oil and gas fields and gold mines to ensure a stronger and more stable platform for growth.

“It does not matter where, as long as it is viable and is a big company with big volume, we will be interested in investing in coal companies, (and) for oil and gas,” Ang told AFP.

San Miguel earlier attempted to acquire a stake in PT Bumi Resources and PT Adaro Energy Tbk – the largest coal producer in Indonesia in terms of market value – but did not pursue it as the stake offered was deemed not big enough.

In May, San Miguel reportedly engaged in talks with Goldman Sachs, one of three financial institutions handling the sale of a 17-percent stake in Adaro Energy to strategic investors. The stake is worth around $500 million.

Aside from San Miguel, investors from China, India, South Korea, Japan and Europe have also expressed interest in Adaro Energy.

San Miguel last month won the auction for the 620-megawatt Limay combined-cycle power plant in Bataan after submitting the lone offer of $13.502 million. It also bagged the independent power producer administrator (IPPA) contract for the 1,000-megawatt (MW) Sual Coal-fired power facility in Pangasinan.

Following its purchase of a 35- percent stake in tollways builder Philippine Infrastructure Development Corp., San Miguel said it is hoping to further build up its infrastructure portfolio with its eyes on airports.

San Miguel’s diversification has also seen it acquire a minority stake in power utility giant Manila Electric Co. and an option to buy a majority stake in local oil refiner Petron Corp. It has also recently acquired 32.7 percent interest in Liberty Telecom Holdings Inc. and is now in discussions with the stockholders of Extelcom for a non-binding memorandum of understanding with respect to its possible acquisition of Extelcom shares.

SMC is currently conducting a legal and financial due diligence of Extelcom to determine whether an investment shall be made.

Aside from tollroad and telecommunications, SMC also announced plans to venture into mining and water utilities through the controversial $1.1-billion Laiban Dam project in Tanay, Rizal.

The investments outside of its core brewing, food processing and packaging businesses offered high-growth opportunities and a hedge against economic downturns, according to Ang.

“You can’t have all your eggs in one basket in case there’s a downturn,” he said.

Ang spoke enthusiastically about San Miguel’s global ambitions, although he would not give any specific details about where the company was hoping to invest.

“We are leveraging left and right. I hope we can buy some good oil fields, gold mines or gas fields... something that will propel the company,” Ang said.