MANILA, Philippines - San Miguel Pure Foods Co. Inc. plans to raise as much as P15 billion from a preferred share offering targeted in the first quarter next year.
In its registration statement filed with the Securities and Exchange Commission, Pure Foods said the preferred shares will be sold at P1,000 each. The preferred share issue is part of a program to raise a total of P50 billion to fund its expansion and diversification into new businesses to include power generation, water and infrastructure.
Pure Foods earlier reclassified 40 million common shares into non-voting, cumulative and non-participating preferred shares.
The terms of the preferred share offering such as dividend rate and payment shall be subject to the SEC’s approval of the reclassification of the company’s common shares to preferred shares.
Pure Foods’ preferred share issuance followed failed negotiations between its parent firm San Miguel Corp. and two prospective buyers – the consortium of the Campos family and private tuna canner Century Pacific Group, and Universal Robina Corp. of the Gokongwei family.
San Miguel rejected their offers since both wanted to acquire 100 percent of Pure Foods. The conglomerate was only willing to divest up to a 49-percent stake in the food processing firm.
San Miguel owns 99.92 percent of Pure Foods, which owns the Pure Foods, Magnolia, Monterey, Star, San Mig Coffee and B-Meg brands.
As of end-March this year, Pure Foods had P121.07 billion in cash and near-cash assets as against P209.4 billion in the same period a year ago.
For its part, San Miguel is also planning a P75-billion fund raising program to fund acquisitions as it seeks stronger avenues to fuel growth. It has raised around $3 billion from asset sales in the past three years.
The conglomerate is hard-pressed to raise funds to cover the purchase substantial stakes in several companies including power distributor Manila Electric Co., oil refiner Petron Corp., Bank of Commerce, Caticlan International Airport and Development Corp., several power plants, toll-road operations and coal mines.