SMC Global Power defers P27.33-B IPO

MANILA, Philippines - SMC Global Power Holdings Corp., the energy arm of food-to-infrastructure conglomerate San Miguel Corp., has pushed back plans to list on the stock exchange due to the prevailing subdued market conditions.

Informed sources said market volatility, triggered by Greece’s debt woes and souring risk sentiment over slowing global demand, prompted San Miguel to defer its power unit’s maiden share sale worth between P12.76 billion to P27.33 billion.

SMC Global Power late last month obtained the Securities and Exchange Commission’s nod to issue 290 million to 385 million shares through an initial public offering at a price ranging from P44 to P71 each share. This was lower than the 300 million to 500 million shares originally planned to be sold to the public.

Investors have been jittery the past weeks as they want to see more direction coming from Europe and the US before deploying funds into IPOs.

Companies would get better valuations on their equity if they wait for market conditions to stabilize, analysts said.

Puregold Price Club Inc., one of the leading supermarket chains in the country, debuted on the stock exchange last week, making it the first company to fall victim to the current volatile market conditions. The company’s share price plunged on its first trading day as investors opted to cash out amid stock market turbulence.

SMC Global Power had planned to use proceeds from the IPO to develop greenfield power projects, acquire existing power generation capacities, and for general corporate purposes.

The company has tapped Standard Chartered Securities (Singapore) Pte. Ltd. as its sole financial adviser as well as joint bookrunner and international managers along with Goldman Sachs Pte. and UBS AG.

On the other hand, ATR KimEng Capital Partners Inc. and SB Capital Investment Corp., were appointed as domestic lead underwriters.

The company is in the advanced stages of planning two clean-coal greenfield power projects with a combined capacity of 450 megawatts, and is considering additional greenfield power projects with an aggregate capacity of up to 3,000 MW over the next five to seven years.

SMC Global Power is also preparing to bid for selected state-owned power generation plants scheduled for privatization as asset sales.

Aside from this, the company is pursuing the vertical integration of its power business by capitalizing on changes in the regulatory structure to expand its sales of power to a broader range of customers, including retail customers. As part of the reorganization of the power related-assets of San Miguel, SMC Global Power acquired a 100 percent interest in San Miguel Electric Corp. which is in the process of obtaining a retail electricity license from the Energy Regulatory Commission.