The conglomerate, which owns some of the country’s biggest food and beverage brands apart from an infrastructure portfolio spanning power generation, oil refining, toll roads, and airports, pulled off the Philippines’ first-ever preferred share exchange and public offer.
The result: it raised P48.86 billion despite tough market conditions.
High-yield investment
“This marks the largest preferred shares issuance and listing on the PSE this year. The offering was met with strong primary market demand, enabling San Miguel to not only fill the P20 billion base size but also max out the P10 billion oversubscription option,” said Juan Paolo Colet, managing director at China Bank Capital.
“Many investors saw this as a chance to get high-yielding fixed-income instruments ahead of any further central bank policy rate cuts,” he added.
China Bank Capital was a key player in arranging the transaction.
It was joined by BPI Capital Corp., Land Bank of the Philippines, Philippine Commercial Capital Inc., RCBC Capital Corp., Security Bank Capital Investment Corp., and PNB Capital & Investment Corp.
PNB Capital, BDO Capital & Investment Corp., and Bank of Commerce served as joint issue managers.
What’s the deal about?
The P18.86 billion exchange offer covered Series 2-P, 2-Q, and 2-R shares, allowing Series 2-J and 2-K holders to swap their investments one-for-one instead of waiting for redemption.
A total of 251.47 million shares were tendered, reflecting strong investor confidence.
“The move introduces greater flexibility and liquidity for investors, an innovation in the local capital markets traditionally limited to straightforward redemptions,” SMC said in a statement.
Mega share sale
SMC simultaneously launched a P30 billion public offer for Series 2-S, 2-T, and 2-U preferred shares, fully subscribed at P75 per share and carrying dividend rates of 6.97 percent, 7.26 percent, and 7.54 percent.
"The twin offerings are part of its broader strategy to align capital structure with long-term value creation and to give investors more avenues to participate in its growth," SMC said in the statement.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
