SMC power generation arm to pursue IPO next yr

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) will pursue the initial public offering (IPO) next year of its power generation arm that is on the lookout for acquisitions.

Even the single largest shareholder in the conglomerate is expected to join the local bourse early in January, its top official said yesterday.

SMC president and chief operating officer Ramon S. Ang said the company hopes to list power generation unit SMC Global Power Holdings Corp.

“Actually, it’s not a problem to raise funds kasi nakapila na yung mga kausap natin. It’s more of acquisition,” Ang told reporters on the sidelines of the Philippine Stock Exchange’s 10th listing anniversary celebration.

SMC Global, which has a power generation capacity of 2,500 megawatts and an equity value of at least $1.5 billion, filed its listing plan to corporate regulators in 2011 but the IPO was deferred.

SMC earlier announced it is in talks with several potential buyers for a private equity deal or an IPO that will raise a minimum of $800 million.

For its part, SMC’s majority shareholder Top Frontier Investment Holdings Inc. will also become a public company next year.

Ang, who is also the president of Top Frontier, said the holding firm will debut in the local bourse in the first or second week of January.

Top Frontier will list by way of introduction or without immediately having to sell shares to the public.

The PSE and the Securities and Exchange Commission (SEC) already approved the listing plans of Top Frontier.

Top Frontier’s shares will be listed in the PSE’s Main Board, with initial listing price at P178 per share, valuing the company at P87.25 billion.

SEC also cleared the distribution of 240.196 million common shares of Top Frontier as property dividend to all holders of common shares of record of SMC.

Stockholders will receive one Top Frontier share for every 10 SMC shares they own as of record date.

SMC owns 49 percent of Top Frontier which, in turn, owns majority of the diversified conglomerate. The cross ownership structure allows both parties to block any takeover or entry of hostile entities given the each other’s rights to match any offer from potential investors.

Top Frontier is backed by former trade minister Roberto V. Ongpin, businessman Iñigo U. Zobel, condiments king Jose Y. Campos and Ang.

Top Frontier is the legal and beneficial owner of 1.573 billion common shares in SMC, or approximately 66.1 percent of the outstanding common stock of SMC.

Aside from SMC, Top Frontier’s investments include the mining rights for the Nonoc Nickel project in Surigao del Norte, Mt. Cadig Nickel project and Lo-oc Limestone project. It also owns exploration permits for certain areas under the Bango Gold project.