SMDC to hike capital to P12.4B to cover 15.1% stock dividend

MANILA, Philippines -  SM Development Corp. (SMDC), the residential property unit of the SM Group of taipan Henry Sy, is raising its authorized capital to P12.4 billion from P8 billion to cover its 15.1-percent stock dividend declaration.

SMDC said its board approved yesterday the increase in its capitalization to 12.4 billion shares with a par value of P1.

At the same time, the company’s board approved the declaration of 1.1 billion common shares as stock dividend, which is equivalent to 15.01 percent (rounded off) of the outstanding shares and will constitute the minimum subscription and paid-in requirement to the capital hike.

SMDC is planning to raise between P5 billion and P10 billion from an international equity offering through a private placement. The offering, which is likely to take place in the first half of the year, will boost the company’s public float to around 30 percent.

Proceeds from the issue would be used to fund its new residential projects under its core SM Residences brand and the MPlace brand that targets a young, mobile market.

The company remains bullish on the property sector as it plans to sell more than 10,000 residential units this year, exceeding sales for 2010.

For this year, SMDC is eyeing a net profit of P4 billion, 33 percent higher than the 2010 figure. Sales are likewise forecast to rise to between P25 billion and P30 billion from P22 billion a year earlier.

SMDC has initially lined up four new projects this year, including MPlace Bicutan beside SM Bicutan and MPlace Ortigas, as well as a new project in Makati and the expansion of Mezza Residences in Sta. Mesa, Manila.

Other projects in the pipeline include Wind Residences, a nine-tower, 20-story condominium building in Tagaytay City with an estimated development cost of P12 billion. The project, which falls under SMDC’s SM Residences brands, will offer a total of 7,758 units when completed in 2015.

With a portfolio of 14 residential projects, the company has already completed its first high-rise development, Mezza, SMDC is set to turn over to customers the last cluster development of mid-rise project Chateau Elysee in Bicutan within the first half.

Also scheduled for turnover this year are Berkeley Residences in the first quarter, Grass Residences Tower 1 in the middle of the year, and Field Residences Tower 2 and 3 in the first half and second half this year, respectively.