San Miguel lists P80-B preferred shares RP’s biggest share sale to date

Diversifying conglomerate San Miguel Corporation today lists P80 billion worth of preferred shares, the country’s biggest to date, at the Philippine Stock Exchange.

The landmark capital-raising activity successfully attracted retail as well as institutional investors seeking higher yields in a low-interest environment.

“Our presence today points to our company’s commitment as an active participant in the capital markets and a value creator for the many investors who hold San Miguel shares or bonds,” SMC president and chief operating officer (COO) Ramon S.  Ang said.

Ang thanked lead underwriter HSBC, the financial community and the investing public for giving San Miguel a vote of confidence. He also credited three factors crucial to the issue’s success, namely the “robustness of the Philippine capital markets and prevailing business optimism, the draw of our company as an attractive investment option, and the coming together of all institutions to create what’s been the game changer for our capital markets.”

The primary offering of Series 2 preferred shares consist of 1.067 billion which was fully subscribed at the issue price of P75 each.  These Series 2 preferred shares come in three sub-series (2-A, 2-B and 2-C) and are peso-denominated, perpetual, cumulative, non-participating and non-voting.

SMC has the redemption option starting the 3rd, 5th and 7th year and every dividend payment thereafter. There will be a “step-up” rate effective at the 5th, 7th and 10th year, respectively, if shares are un-redeemed.  Dividend rates per annum for sub-series 2-A is 7.5 percent, sub-series 2-B at 7.625 percent and sub-series 2-C at 8 percent.

From its stable core food, packaging and beverage businesses, San Miguel has embarked on a diversification program in 2007 and has since gained a foothold in high-yielding industries including energy, fuel and oil, infrastructure, airlines and mining.

“Ever since we embarked on our diversification strategy in 2007, our goal has been to make a deep and lasting positive impact on the Philippine economy through our businesses. San Miguel can play a pivotal role in hastening our country’s growth. The fast-changing industries that we have chosen to participate in are challenging, but they also provide us the greatest opportunities to stay ahead of the curve, grow even further and make a difference,” he added.

Bulk of the proceeds from the Series 2 preferred shares issuance will be used for the redemption of the company’s outstanding Series 1 preferred shares with the balance to be utilized for general corporate purposes, including short-term debt repayment.

Hong Kong and Shanghai Banking Corporation is the conglomerate’s lead issuer for the share sale while joint book runners include Union Bank, BDO Capital, China Bank, RCBC Capital, First Metro Investment, ING, PCCI, SB Capital, Standard Chartered Bank and UCPB. Participating underwriters are Insular Investment Corporation and PNB Capital and while the selling agents are Bank of Commerce and the trading participants of the PSE.