SMC kicks off P80-B preferred share sale

MANILA, Philippines – Diversified conglomerate San Miguel Corp. (SMC) is selling an initial P30 billion worth of preferred shares as part of a fund-raising plan.

SMC has tapped BDO Capital & Investment, China Bank Capital, ING Bank, PNB Capital and Investment, RCBC Capital, SB Capital Investment Corp., Standard Chartered Bank, and United Coconut Planters Bank as lead underwriters and bookrunners for the issue.

The initial offer, which forms part of a planned P80 billion fund-raising program, involves 280 million Series 2 preferred shares with an oversubscription option of up to 120 million shares, to be sold at P75 apiece.

Preferred shares refer to a class of ownership in a corporation that have a higher claim on its assets and earnings than common stock. They generally have a dividend that must be paid out before dividends to common shareholders but the shares usually do not carry voting rights.

“Proceeds of this offer will be principally used for the refinancing of the existing US dollar-denominated obligations of the company and for other general corporate purposes,” San Miguel said.

The offer may be issued in up to three series of five, 10 and seven-year preferred shares.

Last September, SMC successfully raised P33.5 billion from a preferred share sale amid strong interest from investors.

The conglomerate, originally a food and beverage company, has diversified into telecommunications, oil refining and infrastructure.

In the nine months to September 2015, the conglomerate posted a consolidated net income of P26.8 billion, up seven percent year on year. Operating income grew 23 percent to P58.1 billion on the back of higher revenues from its infrastructure unit and core food, beverage and packaging businesses.