MANILA, Philippines - Diversifying conglomerate San Miguel Corp. is reportedly sounding out lenders to arrange a loan facility amounting to between $800 million to $1 billion for refinancing.
Ramon S. Ang, president and chief operating officer of San Miguel, said in a text message that banks are offering better refinancing terms and rates.
He did not indicate how much San Miguel was planning to borrow to restructure the food to power firm’s outstanding $600 million loans.
A Reuters report said San Miguel had initially shortlisted six banks to thresh out details of the loan. The conglomerate was reportedly looking at a five-year revolving credit for the self-arranged facility which is expected to lengthen San Miguel’s maturity profile.
San Miguel Corp. is trimming its stake in its food and packaging units to further beef up its war chest in preparation for a potential $2-billion acquisition. The target firm is rumored to be PNOC-Exploration Corp., which the Department of Finance has been pushing to sell through a negotiated sale.
Industry observers have branded as unlawful and disadvantageous the planned negotiated sale of the government’s shares in the Malampaya natural gas project since it would not go through any public bidding.
Ang earlier said San Miguel was looking to acquire 60 percent of the unnamed energy company, which has a very “strong cashflow.”
San Miguel has received offers from several investors for its food business, which has an enterprise value of $1.8 billion.
Japan’s Nihon Yamamura Glass is also in talks with San Miguel to to raise its stake in San Miguel Yamamura Packaging Corp. to 49 percent from 35 percent. The additional 14 percent stake is worth $100 million.
San Miguel is seeking shareholders’ approval to sell more than 51 percent of core businesses and create a common stock to fuel its aggressive push into heavy industry.
San Miguel is currently in talks to buy stakes in railways, toll roads, airport projects and coal mines. Last month it said it was studying the feasibility of building a bullet train that would run across the main Luzon island.
San Miguel began divesting some of its businesses in 2007 to fund its massive diversification program. Among these deals included the sale of San Miguel’s 65 percent stake in the Philippine unit of Coca-Cola Co for $590 million, and the sale of 43.3 percent of its flagship San Miguel Brewery Inc to Japan’s Kirin Holdings for $1.3 billion.
Its investment portfolio currently includes a joint venture with Qatar Telecommunications Co, a stake in power distributor Manila Electric Co, and an option to take a controlling stake in oil refining giant Petron Corp.