SEC approves SMC, Cirtek's P51.81-B public offerings

Published June 15, 2021, 4:19 PM

by James A. Loyola

The Securities and Exchange Commission (SEC) has approved the planned public offerings of P51.81 billion worth of securities by San Miguel Corporation (SMC) and Cirtek Holdings Philippines Corporation.

In its meeting on June 15, the Commission En Banc resolved to render effective the registration statement of SMC for the issuance of fixed-rate bonds worth up to P50 billion and of Cirtek for the offering of entitlement rights worth up to P1.81 billion.

SMC plans to issue the debt securities in one or more tranches within a period of three years with the first tranche consisting of up to P20 billion worth of six-year fixed-rate bonds due 2027, with an oversubscription option of up to P10 billion.

The firm expects to net P19.74 billion from the base offer plus P9.88 billion, assuming the oversubscription option is fully exercised. Proceeds will be used to redominate existing dollar-denominated obligations of SMC.

The bonds will be offered at face value, and will be listed and traded on the Philippine Dealing & Exchange Corp.

SMC engaged BDO Capital and Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, ING Bank N.V., Manila Branch, Philippine Commercial Capital Inc., PNB Capital & Investment Corporation, RCBC Capital Corporation, and SB Capital Investment Corporation as the joint lead underwriters and bookrunners for the offer.

Meanwhile, Cirtek will offer entitlement rights to 250 million common shares of the company, 250 million bonus detachable warrants that will be free of charge, and 250 million common shares underlying the bonus detachable warrant, with an exercise price of P4.50 to P7.25 each.

Cirtek expects to net P1.11 billion to P1.79 billion from the offer of the entitlement rights, based on the offer price of P4.50 to P7.25 per share.

Assuming that all the bonus detachable warrants are exercised, the company expects to receive net proceeds of about P1.8 billion based on the exercise price of P7.25.

Proceeds from the offer will be used to refinance existing debt or pay out short-term obligations of the company’s subsidiary, Cirtek Electronics Corporation (CEC), and finance working capital of units Quintel, CEC, and Cirtek Advanced Technologies and Solutions, Inc.

Meanwhile, proceeds from the exercise of the bonus detachable warrants will be used to finance the working capital of the aforementioned subsidiaries.

The offer period will run from July 9 to 21, according to latest information submitted to the Commission. The shares will be listed and traded on the Main Board of the Philippine Stock Exchange.

Abacus Capital and Investment Corporation and PNB Capital Investment Corporation will serve as joint issue managers and lead underwriters for the offer.