SMC eyes new preferred shares issue

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. is planning another preferred share issue through a private placement worth about P17 billion.

In a disclosure to the Philippine Stock Exchange, San Miguel said its board approved the issuance of up to 226.8 million Series 1 preferred shares. The issue price and the dividend rate of the preferred shares have yet to be determined by the conglomerate’s board.

San Miguel A shares, available to Filipino investors, closed unchanged yesterday at P66 each.

“The company is currently in discussions with potential investors on the terms of the preferred share issuance,” San Miguel said.

Proceeds from the issue will be used to finance investments and acquisitions, it added.

San Miguel is on the hunt for oil, gas and coal assets overseas to further boost growth outside of its core brewing, food and packaging business and ensure a stronger platform for growth.

It 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.

San Miguel last month won the auction for the 620-megawatt Limay combined-cycle power plant 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 plant in Pangasinan.

Following the purchase of a 35-percent stake in Tarlac-La Union tollways operator Philippine Infrastructure Development Corp., San Miguel 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 possible acquisition.