SMDC pegs stock rights offer rice at P3.50

MANILA, Philippines - SM Development Corp. (SMDC), the residential property development firm of retail tycoon Henry Sy, has pegged the price of its planned P5-billion stock rights offering at P3.50 each share.

In a disclosure to the Philippine Stock Exchange, SMDC said the offer price represents a discount of 13.25 percent to the 15-day volume-weighted average price of its shares from Oct. 30 to Nov. 20, 2009.

SMDC is offering 1.37 billion common shares to stockholders at a ratio of one share for every three shares held as of Dec. 7, 2009.

The offer period will run from Jan. 4-8 while the listing of the shares has been tentatively set on Jan. 18.

Proceeds from the rights issue will be used for landbanking and other general corporate purposes.

BDO Capital and Investment Corp. will serve as underwriter for the rights issue.

SMDC currently has five ongoing projects: the fifth cluster of Chateau Elysee (a six-cluster mid-rise condominium project in Parañaque City) which is 88 percent complete; Berkeley Residences in Katipunan Road, across Miriam College and Grass Residences beside SM City North EDSA (with the first tower 47 percent complete); Sea Residences near the Mall of Asia Complex in Pasay City and Field Residences in Sucat, Parañaque.

Other projects slated for launch this year are Princeton Residences (a 37-story condominium building located in a 2,400-square meter property along Gilmore St., Quezon City), Sun Residences beside Welcome Rotonda in Quezon City, Jazz Residences along Jupiter St., Light Residences in Mandaluyong City and Wind Residences in Tagaytay City.

SMDC has earmarked P7.2 billion for capital expenditures this year or 40 percent higher than the 2008 budget. Around 80 percent of the capital budget will be sourced from internally generated funds while the remaining 20 percent will come from borrowings

SMDC reported a net income of P1.4 billion in the first nine months of the year, more than 60 times the P23 million recorded the same period a year ago on the back of robust sales and higher completion rates of its various projects,

Consolidated revenues surged 78 percent to P4.1 billion during the period under review, mainly due to the recovery in the financial markets.