SMC plans P30 billion preferred share sale

MANILA, Philippines — Diversified conglomerate San Miguel Corp. (SMC) is targeting to kick off by next month a fresh round of preferred share sale, which aims to raise as much as P30 billion.

SMC said it has filed with the Securities and Exchange Commission (SEC) a registration statement and prospectus for its planned public offering of P20 billion worth of Series 2 preferred shares, with an oversubscription option of P10 billion.

The issuance includes 266.67 million Series 2 preferred shares, with an oversubscription option of 133.33 million shares, at an offer price of P75 per share.

The offer will be issued in three subseries: Subseries 2-V, 2-W and 2-X.

Based on the preliminary prospectus submitted by SMC, the initial dividend rate-setting and announcement are expected to be made on July 13.

The offer period is expected to run from July 15 to July 23, while the issue date and the commencement of trading on the Philippine Stock Exchange (PSE) are expected on July 31.

Net proceeds will be used by the company to refinance existing short-term loans incurred to redeem Series 2-I preferred shares in March, as well as to repay Series C and Series J bonds maturing in March 2027.

It will also be utilized for additional investments in the group’s infrastructure business, including the Manila International Airport and other airport-related projects in Bulacan.

SMC said it may use up to P5 billion from the net proceeds from the offer to invest in the airport and other airport-related infrastructure projects.

Bank of Commerce, BDO Capital and Investment Corp. and China Bank Capital Corp. will serve as joint issue managers of the issuance.

They will be joined by BPI Capital Corp., Land Bank of the Philippines, Philippine Commercial Capital Inc., PNB Capital and Investment Corp., RCBC Capital Corp. and Security Bank Capital Investment Corp. as joint lead underwriters and bookrunners.

In October last year, SMC listed its maiden exchange offering of preferred shares – SMC2P, SMC2Q, SMC2R – and preferred securities SMC2S, SMC2T and SMC2U from its follow-on offering on the PSE.

SMC raised P30 billion for its Series 2-S, 2-T, and 2-U prefs, one of the biggest amounts of capital raised via a follow-on offering in PSE’s history.

The funds raised from the follow-on offering were allocated for refinancing of SMC’s short-term loans used to redeem Series 2-F preferred shares and to pay for partial redemption of Series 2-J and 2-K preferred shares.