SMC unit to sell 31% Bancommerce stake to affiliate firms

MANILA, Philippines - San Miguel Properties Inc. (SMPI), the real estate development unit of diversifying food and beverage conglomerate San Miguel Corp., is selling its 31- percent interest in Bank of Commerce for P3.1 billion.

In a disclosure to the Philippine Stock Exchange, SMPI said its board approved the sale of its stake in Bancommerce to “various interested buyers.”

In an interview with The STAR yesterday, Bancommerce president and CEO Raul de Mesa clarified that the buyers are also companies within the San Miguel Group.

He added that the bank’s board of directors also recently approved the increase in capitalization to P10 billion, out of which P6.9 billion would be by way of the issuance of 40 million new common shares at P173 each.

The sale, however, is still subject to regulatory approval, SMPI said.

San Miguel’s retirement fund owns another 20-percent interest in Bancommerce, making the San Miguel Group the majority owner of the medium-sized commercial bank.

Analysts said San Miguel needs cash to fund its acquisitions, particularly in heavy industries such as power, mining and infrastructure.

PhilRatings Services Corp. recently upgraded the credit issuer rating of the bank due to the its improving capital position and San Miguel’s acquisition of a controlling stake.

PhilRatings said the San Miguel Group’s majority ownership has strengthened Bancommerce’s competitive position given the opportunity of servicing dominant and leading domestic companies which belong to the group. The entry of San Miguel has also led to the expansion in Bancommerce’s business as the bank has been able to provide its products and services to the companies, as well as the suppliers/dealers/distributors of the companies within the group, PhilRatings said.

PhilRatings added that the controlling interest of San Miguel in the bank provides Bancommerce a greater opportunity to further expand its volume of business. This will result from the major projects being undertaken by Bancommerce to generate additional revenue and funding streams from partners and consumers of the companies within the San Miguel Group.

San Miguel recently raised P7.3 billion from the sale of preferred shares through a private placement. Proceeds from the private placement would be used to fund new ventures and acquisitions.