SMC secures P 34B from PH’s largest share sale of 2023

Tycoon Ramon Ang-led San Miguel Corp. (SMC) raised P34 billion from the country’s largest equity exercise this year, defying a grueling market slump that prompted other corporate giants to stall their respective share sale.

SMC, the country’s biggest conglomerate by revenue, completed the sale of 453.33 million preferred shares, priced at P75 each. The shares were listed on the Philippine Stock Exchange on Friday.

During the listing ceremony, PSE president Ramon Monzon called the follow-on (FOO) preferred share offer a “resounding success” after all base offer shares and a portion of the oversubscription option were gobbled up by the market.

“A number of companies deferred their capital raising plans this year, apprehensive about the market’s volatile conditions,” Monzon said, adding: “But SMC, as one song goes, went where the brave dared not go and was amply rewarded for it.”

Started in 1890 as Southeast Asia’s first brewery, the company has grown into the Philippines’ most diversified conglomerate, whose annual revenues of over P1 trillion are often measured against the country’s national output.

SMC’s portfolio spans food, drinks, energy and infrastructure, which includes toll roads and an ongoing international airport project in Bulacan province.

The recent share sale involved a base offer of 400 million preferred shares, a type of equity instrument that pays fixed dividends to holders. The offer also included an oversubscription option for another 266.67 million shares, which valued the entire deal at a potential P50 billion.

SMC’s preferred shares were divided into three classes. The subseries 2-L will pay a dividend rate of 7.9145 percent, Series 2-N will pay 8.3466 percent and Series 2-O will pay 8.5936 percent.

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“The deal demonstrates the market’s confidence in the strength and vision of San Miguel Corp. as an important engine of economic activity and growth,” Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., one of the deal arrangers, told the Inquirer.

“It also shows that the Philippine capital market has significant liquidity to support large corporate issuances. This should encourage other issuers to undertake sizable fixed income offerings next year,” he added.

SMC previously said proceeds would be used to strengthen its balance sheet by repaying loans and other obligations. It may also use proceeds for its P735-billion New Manila International Airport project in Bulacan province. INQ