Sy Jr's UEM Development eyes P30B through debt/equity issues

MANILA, Philippines - UEM Development Philippines, a publicly-listed holding company taken over by Henry Sy Jr., is aiming to raise P30 billion through equity or debt issuances to fund its foray into large-scale infrastructure businesses and refinance obligations.

In a special shareholders’ meeting held yesterday, the eldest son and namesake of retail magnate Henry Sy said the company is exploring all options to raise funds for its venture into power, utilities, infrastructure and related businesses. Sy Jr. is chairman and president of UEM, controlling 47.07 percent of the listed firm’s outstanding capital stock.

Gary Cheng, managing director of Fortman Cline Capital Markets, said UEM is planning to undertake a preferred share offering within the next six months,   subject to market conditions and other considerations. Fortman Cline is UEM’s financial advisor.

UEM director and corporate secretary Vicente Gerochi IV said the company has approved the issuance of 65 million non-voting preferred shares to be sold through a public offering.

Shareholders also approved yesterday a plan by the company to take control of 60 percent of the country’s national transmission highway operated by National Grid Corp. of the Philippines (NGCP) through a share swap deal valued at P14 billion.

Under the scheme, UEM, which shall be renamed Synergy Grid & Development Philippines Inc., will issue 100 million common shares at P140 a piece in exchange for all the outstanding shares of each of One Taipan Holdings Inc. and Pacifica21 Holdings Inc.

One Taipan controls Monte Oro Grid Resources Corp., which holds 30 percent plus one share in NGCP while Pacifica21 owns controlling shares in Calaca High Power Corp. of businessman-stockbroker Roberto Co-yiuto which, in turn, owns 30 percent in the country’s transmission network.

The State Grid Corp. of China holds the remaining 40 percent of NGCP.

In preparation for the share swap, UEM is raising its existing authorized capital of P50 million to create an additional 100 million common shares and 65 million non-voting, non-cumulative preferred shares of stock.     

Sy Jr., also vice chairman of SM Investments Corp., initially entered UEM in September, when he acquired a 45.5 percent stake in the company as part of a broader plan to pursue investments in the infrastructure sector. A subsequent tender offer increased his stake to 47.07 percent.

Founded in 1970, UEM was formerly known as Mankayan Minerals Development Co., Inc. before it changed its name to UEM Development in February 1994. It renders consultancy and advisory services, particularly for construction projects.