SEC clears SMB’s P20-B bond issue

MANILA, Philippines - San Miguel Brewery Inc. (SMB), the flagship unit of diversified conglomerate San Miguel Corp., has secured regulatory approval to raise as much as P20 billion from the debt market.

In a text message, Gerard M. Lukban, commission secretary of the Securities and Exchange Commission (SEC), said they approved late Monday SMB’s application for a bond issuance.

Last month, SMB filed its registration statement for the registration of P15 billion worth of fixed-rate bonds consisting of Series G and Series H bonds. SMB also has an option to increase the offering by another P5 billion in case of oversubscription.

The Series G bonds will mature on Apr. 2, 2012 while the Series H bonds are due on April 2, 2014.

“The proceeds thereof will be used to refinance the tranche of the peso-denominated fixed-rate Series B bonds issued by the company in 2009 maturing on April 4, 2014,” SMB said.

It is the company’s first major fundraising in almost two years. In April 2012, SMB raised P20 billion through P3 billion worth of Series D, P10-billion Series E and P7-billion Series F bonds that carry 6.05 to 6.6 percent fixed interest per annum.

Last year, the brewery’s earnings slipped 17 percent to P12.5 billion from P15.1 billion in 2012. But without the impact of the foreign exchange fluctuations on the company’s dollar-denominated term facility and without non-recurring items in 2012, its consolidated net income in 2013 would have only declined 3.4 percent year-on-year.

Higher excise taxes for alcoholic beverages also dragged SMB’s sales volume, which fell nine percent. SMB’s net sales revenue hit P75.1 billion as it sold 204 million cases last year. In 2012, SMB’s revenues reached P75.6 billion.

In May, SMB delisted from the Philippine Stock Exchange after failing to hike its minimum public ownership level to the 10 percent required by the local bourse.

In a series of meetings last year, parent firm San Miguel failed to urge partner Kirin Brewery Co. to sell shares to the public.

Kirin, Japan’s largest beer company, owns 48.39 percent of SMB while 51-percent stake belongs to San Miguel, which wants to retain its control of the brewer.

– Neil Jerome Morales

SMB is the company behind iconic beer brand San Miguel Pale Pilsen, along with sRed Horse, San Mig Light and Gold Eagle.