Diversified conglomerate San Miguel Corporation (SMC) has raised P34 billion from the sale of firm offer preferred shares and over-subscription option shares during its follow-on offering (FOO).
The Philippine Stock Exchange said SMC formally listed its Series 2-L, 2-N and 2-O preferred shares through a bell ringing ceremony held last December 1, 2023.
PSE President and CEO Ramon S. Monzon commended SMC for its decision to tap the equities market at a time when most companies have deferred their capital raising plans.
“SMC’s FOO was a resounding success. Not only were the base shares fully taken up, but part of the oversubscription option was likewise availed of by savvy investors,” said Monzon.
He noted that, “Clearly, this is an affirmation of the market’s trust and confidence in the company’s proven track record and the visionary leadership of the company’s President and CEO, Mr. Ramon S. Ang, and his capable management team.”
SMC had recently registered P65 billion billion worth of preferred shares with the Securities and Exchange Commission and slated a follow-on offering for up to P30 billion in November to pay debt and fund its massive airport project.
The SEC approved SMC’s Registration Statement and Prospectus for the Shelf Registration of up to 866.67 million Series 2 Preferred Shares to be offered within a period of three years.
It also approved the Offer Supplement for the Public Offering of 400 million Series 2 Preferred Shares with an Oversubscription Option of up to 266.67 million Series 2 Preferred Shares.
The Offer Shares were issued in three subseries: Series 2-L, Series 2-N, and Series 2-O, at an offer price of P75.00 per share. The Offer Shares were issued from the Series 2 Preferred Shares currently held in treasury of the Company.
The first tranche consisted of P30 billion firm offer shares and an oversubscription option of up to P20 billion.
SMC will use the proceeds from the offering for the repayment of Peso-denominated short-term loan facilities; repayment of the Series B Bonds and Series H Bonds; and, in the event of exercise of the oversubscription option, additional investments in the Manila International Airport and other airport-related projects.
A portion of the net proceeds from the Offer will be used to repay peso-denominated short-term loan facilities used to refinance the Company’s $200 million facility agreement dated November 16, 2018 between the Company, Mizuho Bank, Ltd. as Mandated Lead Arranger and Bookrunner, and Mizuho Bank, Ltd., Singapore Branch as Original Lenders.
It will also repay the $250 million facility agreement dated September 27, 2017 between SMC and Mizuho Bank, Ltd., Singapore Branch as Original Lender.
Up to P7.29 billion from the net proceeds of the offer will be used for the repayment of SMC’s Series B Bonds with an annual interest rate of 5.284 percent, and a maturity date of March 1, 2024. The repayment of Series B Bonds will be made on March 1, 2024.
Up to P10 billion from the net proceeds of the offer will be used for the repayment of SMC’s Series H Bonds with an annual interest rate of 5.55 percent, and a maturity date of October 4, 2024. The repayment of Series H Bonds will be made on October 4, 2024.
SMC also intends to use up to P15.80 billion from the net proceeds from the offer to invest in its airport and other airport-related projects, by way of equity, debt, or other instruments, within 24 months from the Issue Date.
San Miguel Aerocity Inc. (SMAI), a wholly-owned subsidiary of SMC, is building a modern, world-class international airport in Bulacan that will address today’s and future capacity requirements for air travel in the Philippines.
The proceeds from the offer will be utilized by the Company through direct or indirect investments in SMAI or its other infrastructure subsidiaries.