SMIC to borrow P34 B to fund 2015 capex

MANILA, Philippines - SM Investments Corp. (SMIC), the investment holding vehicle of the Sy family, plans to tap the debt market as a major source of funding for its P85-billion capital expenditure budget this year.

SMIC chief finance officer Jose Sio said the conglomerate intends to raise as much as P34 billion this year through debt to finance its capital spending.

“One third to 40 percent of that (P85-billion capex) will be outside sources. Debt primarily,” he said.

Sio said SMIC is open to “any kind of debt” given the high liquidity in the country’s financial service sector.

“Anytime, even tomorrow if I can get a good rate. It may be local or international, but we prefer local if we can get it,” Sio said.

“Raising of funds, it’s a timing problem for us. As soon as there is the right time – there is liquidity, low interest rate – we’ll  go. We go out because there is an opportunity for us,” he added.

SMIC is allocating P85 billion for its capital expenditures this year, the bulk or P70 billion would go to integrated property firm SM Prime Holdings Inc.

SMIC’s retail and banking units, meanwhile, would get the remaining P15-billion budget.

SM Prime, the country’s largest mall developer, intends to utilize its capex budget for the year to further expand its empire of shopping centers across the country as well as beef up its property business through SM Development Corp. (SMDC)

New malls to be launched this year are SM Sangandaan in Caloocan, SM San Mateo in Rizal, SM Cabanatuan in Nueva Ecija, and SM Trece Martires in Cavite, while expansion of its Iloilo mall is also due for completion.

SMDC, on the other hand, is set to launch seven new residential projects this year and is aiming to push through with its maiden venture into low-cost horizontal development.

For its office developments, SM Prime plans to begin construction early this year of two new office buildings in Quezon City along EDSA and in Ortigas that would beef up the SM Group’s portfolio by 160,000 square meters in gross floor area upon completion by 2017.