Diversified conglomerate San Miguel Corporation is seeking to register P65 billion billion worth of preferred shares with the Securities and Exchange Commission as it plans to undertake a public offering worth up to P50 billion in November this year to pay debt and fund its massive airport project.

In a disclosure to the Philippine Stock Exchange, the firm said it has filed a Registration Statement with the Preliminary 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 filed 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 are to be issued in up to three subseries: Series 2-L, Series 2-N, and Series 2-O, at an offer price of P75.00 per share. The Offer Shares will be issued from the Series 2 Preferred Shares currently held in treasury of the Company.

The first tranche will raise P30 billion and another P20 billion if the oversubscription option is fully subscribed for a total offering size of P50 billion. The shares will be listed at the PSE.

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.

SMC has tapped Bank of Commerce, BDO Capital & Investment Corporation, and China Bank Capital Corporation to be the joint issue managers. Joint lead underwriters for trading participants are BankCom and PNB Capital.

The Offer Shares are being offered for subscription solely in the Philippines through the Joint Lead Underwriters and Bookrunners Asia United Bank Corporation, BankCom, BDO Capital, BPI Capital Corporation, China Bank Capital, Land Bank of the Philippines, Philippine Commercial Capital, Inc., PNB Capital and Investment Corporation, RCBC Capital Corporation, SB Capital Investment Corporation, and Union Bank of the Philippines.