SMC power unit eyes $300M from bond offer

San Miguel Global Power Holdings Corp. (SMGP), the power arm of the Ramon Ang-led conglomerate, is looking at issuing another $300 million worth of perpetual securities in an offshore bond market, with some of the proceeds eyed to fund solar energy assets.

In a document posted on Philippine Dealing & Exchange Corp. (PDEx), SMGP said its board has given approval of the exercise.

The senior perpetual capital securities would be listed on the Singapore Exchange Securities Trading Ltd.

However, SMGP noted that the figures may still be changed depending on “prevailing conditions as may be advantageous to the corporation.”

The group has also yet to disclose the target date of listing in Singapore.

A portion of the proceeds would be used to settle costs and expenses related to the offers, while some would also go to pre-development costs of solar energy projects.

“For the avoidance of doubt, the net proceeds will not be applied to finance any of the company’s existing and planned coal-fired power assets,” SMGP added.

For this new securities offer, SMGP appointed Australia and New Zealand Banking Group Ltd., DBS Bank Ltd., Mizuho Securities Asia Ltd. and Standard Chartered Bank as joint lead managers.

Also named were DB Trustees (Hong Kong) Ltd. as trustee and Deutsche Bank AG, Hong Kong Branch as paying agent, calculation agent, transfer agent, and registrar; and Latham & Watkins as listing agent.

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The firm issued $492.11 million worth of debt paper in November 2019, and another $723.9 million in senior perpetual capital securities in October 2020.

SMGP is one of the energy giants in the Philippine market with 5,207 megawatts (MW) of capacity as of the first semester this year. Its portfolio includes facilities that run on natural gas, coal, and renewable energy, such as hydroelectric power and battery energy storage systems.

The group recently teamed up with two other titans in the power sector —Meralco PowerGen Corp. and Aboitiz Power Corp.— for a $3.3-billion deal aimed at launching the “most expansive” liquefied natural gas (LNG) facility in Batangas.

The companies expect to receive approval from the Philippine Competition Commission within the third quarter for this LNG project.