SMDC prices rights offer at P6.38 to raise P11.7 billion

MANILA, Philippines – SM Development Corp. (SMDC) has pegged the price of its planned stock rights offering at P6.38 each share to raise around P11.7 billion.

In a disclosure to the Philippine Stock Exchange, SMDC said the final offer price represents a discount of 18.19 percent to the 15-day volume-weighted average price of SMDC shares from Aug. 26 to Sept. 17.

SMDC stocks closed 3.7 percent lower yesterday at P9 each from P9.30 last Monday.

Under the stock rights offer, Shareholders can buy one rights share for every three existing shares held as of Oct. 6.

Proceeds from the offering will be used to fund the company’s aggressive landbanking activities and ongoing and future construction projects

The offer period is expected to start on Oct. 18 and will run until Oct. 22 while the listing was tentatively scheduled on Nov. 3.

This is the second rights offering conducted by the company for this year. The first one was in January when it raised nearly P5 billion through the sale of 1.37 billion common shares at P3.50 apiece.

In May, SMDC raised P10 billion from the issuance of corporate notes, which was more than three times oversubscribed by domestic institutional investors.

SMDC is planning to acquire properties in Cebu and Davao to tap a wider clientele base, particularly overseas Filipino workers.

Affiliate SM Land has offered nearly P48 billion to develop a 33.1-hectare lot south of Fort Bonifacio in Taguig City into a mixed-use complex. Under the government’s joint venture rules for such “Swiss challenges,” SMLI will bag the contract if it can match the highest counter-offer.

As of June this year, SMDC had 13 residential projects in the market including its affordable housing brand, My Place. My Place South Triangle – the pilot project located in South Triangle on Panay Avenue in Quezon City, consists of four condominium towers, offering a total of 3,000 units with sizes ranging from 20 square meters to 40 square meters. Slated for completion in the first half of 2013, the project is estimated to cost around P2 billion.