MANILA, Philippines - SM Investments Corp. (SMIC) is seeking the approval of the Securities and Exchange Commission (SEC) to issue P50 billion in fixed rate retail bonds in the next three years.
The initial tranche involves the issuance of up to P20 billion in seven-year bonds including an oversubscription option of P5 billion this year.
The remaining P30 billion will be issued within the next three years under the SEC’s shelf registration program.
Proceeds will be used to refinance the company’s existing debt obligations and fund future investments and strategic acquisitions.
Of the P15 billion, P6.15 billion will be used for debt refinancing while P8.72 billion will go to investments and acquisitions.
If the oversubscription option of P5 billion is utilized, an additional P4.96 billion will also be used for the company’s strategic investments.
The move is part of the company’s strategy to maintain its leading market share in its retail and property business segments by diversifying and expanding the businesses of the group.
“The issuer intends to accomplish this by continuing to expand the group’s mall and retail activities into major growth centers of population in Metro Manila and particularly in the provinces where there are opportunities for growth,” SMIC said.
In the first half of the year, SMIC reported a consolidated net income of P13.5 billion or an increase of 10 percent over the same period last year with the property business leading the growth. Consolidated revenues rose six percent to P138.9 billion.
Property unit SM Prime Holdings posted P18.7 billion in net earnings, up 90 percent year-on-year.
At present, SM’s retail operations consist of non-food under The SM Store and food under SM Markets comprising of SM Supermarket, SM Hypermarket, and Savemore and other food retail stores under Waltermart and Alfamart.
SM Prime is the largest integrated property developer in the Philippines with interests in malls, residences, offices, hotels and convention centers as well as tourism-related property developments.
SM’s interests in banking are in BDO Unibank and China Banking Corp.