Bright prospects

Despite his company’s recent setback with its Calax bid, San Miguel Corp. (SMC) president Ramon Ang seems unfazed and in fact is still very upbeat over prospects of his existing and future businesses.

Contrary to what others say about SMC’s delicate credit situation, Ang says that if local banks can no longer accommodate SMC’s needs because of the single borrower’s limit rule, that should not be a problem because a good number of foreign banks are in fact wooing the company.

Never mind that Ang is friends with the heads of several foreign banks. SMC is one Philippine company that the foreign banking community is looking forward to becoming a client even without the close personal ties.

SMC has a very healthy financial position. Its gearing ratio which is based in net debt/EBITDA wad 2.87x as of the first quarter of 2014, way below its covenant with the banks at 5.5x.

The company has also grown by 55 percent in terms of revenues every year for the last six years.

SMC expects a major leap starting 2015 with the full operation of a number of its projects, including Petron’s refinery upgrade, TPLEX, NAIA Expressway, the Boracay airport, the Limay and Davao power plants, and Skyway Stage 3.

These are expected to significantly increase revenue and almost double EBITDA levels.

Ang also does not cease to surprise the business community.

His recent acquisition of a 30-percent stake in GMA Network (the 30 percent may be raised to 51 percent in the near future) has as expected raised not a few eyebrows. After all, how does a media company fit in SMC’s existing business model?

Ang clarifies that the investment is his personal one. After all, being eight percent foreign-owned, SMC cannot own a media company that is required by the Constitution to be 100 percent Filipino-owned.

But eventually, there will be synergies with SMC’s existing businesses. SMC’s telecommunications business which was focused on text, voice, and data but Ang realized that this is not really the way to go so he is revamping the business model.

His new telco company will now focus on digital mobile which will of course require content. And that is where GMA 7 will come in handy.

Capital expenditure for the new telco, which will use fiber optic technology, will be around $2 billion. Ang says they are just waiting for the National Telecommunications Commission (NTC) to bid out the 2100 frequency to complete the company’s requirement.

SMC’s Tarlac-Pangasinan-La Union Expressway (TPLEX) project is another much-awaited one.

Ang reveals that the Urdaneta exit of TPLEX will be open by December. By end of next year, the La Union exit will be opened to the public thereby completing the expressway.

There is also a pending application that will connect TPLEX to another expressway that will lead all the way to Laoag.

Some may find his bids (SMC’s Calax bid was P8 billion more than the next highest bidder; its NAIA Expressway bid of P11 billion was also way above the other bidders) outrageous, but this is only a reflection of Ang’s confidence in the economy.

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