MANILA, Philippines - Gokongwei-owned conglomerate JG Summit Holdings Inc. is set to raise as much as P30 billion from the bond market this year, with proceeds to partly finance the purchase of P72 billion worth of minority stake in power distribution giant Manila Electric Co. (Meralco).
In an en banc decision, the Securities and Exchange Commission (SEC) approved the registration of up to P30-billion bonds to be issued in one or more tranches.
“The company will be offering an aggregate principal amount of P15 billion with an ovesubscription option of up to P15 billion granted by JG Summit in favor of the joint lead managers and joint lead underwriters,†the SEC said.
The offer period is from Feb. 10 to Feb. 19.
Specifically, JG Summit plans to sell five-year bonds due in 2019, seven-year bonds that will mature in 2021 and 10-year bonds due in 2024.
“The net proceeds of the offer shall be used by JG Summit for general corporate purposes and in relation to its completed acquisition of 305.68 million Meralco shares from the San Miguel Corp. (SMC),†the conglomerate said.
Excluding registration, taxes and underwriting fees, proceeds from the bond offering is estimated at P29.72 billion.
In late September last year, the Gokongwei family’s listed holding firm struck a deal to buy a 27-percent stake in Meralco for P72 billion from SMC, which is focusing on various investment opportunities like infrastructure projects and oil and gas acquisitions.
To fund the acquisition, JG Summit had raised P8.8 billion through an overnight share sale and P12 billion by unloading a portion of its stake in snacks giant Universal Robina Corp.
JG Summit hired BDO Capital & Investment Corp., First Metro Investment Corp., BPI Capital Corp., The Hongkong Shanghai Banking Corp. Ltd. and Standard Chartered Bank as lead managers.
Local credit rater Philippine Rating Services Corp. earlier assigned the PRS Aaa score for JG Summit’s long-term bonds. Obligations rated PRS Aaa are of the highest quality with minimal credit risk.
JG Summit, one of the largest and most diversified conglomerates in the Philippines, is into budget airline (Cebu Pacific), property (Robinsons Land Corp.), banking (Robinsons Bank Corp.), petrochemicals (JG Summit Petrochemicals Corp.), and snacks and beverage.