SMC power unit closes $300-million bond issue

MANILA, Philippines - SMC Global Power Holdings Corp., the wholly-owned power unit of diversifying conglomerate San Miguel Corp., successfully closed its maiden bond issue at an optimal size of $300 million.

In a disclosure to the Philippine Stock Exchange, San Miguel said the five-year dollar bond issue was priced at seven percent, which is at the tight end of the pricing guidance of 7.25 percent.

ANZ (Australia and New Zealand Banking Group Ltd.), HSBC and Standard Chartered Bank were the joint lead managers for the issue.

SMC Global Power has applied to list the bonds with the Singapore Exchange Securities Ltd.

Proceeds from the bond issue will be used to finance investments in power-related assets, fund payments or prepayments of obligations to state privatization agency Power Sector Assets & Liabilities Management Corp. (PSALM), as well as for general corporate needs.

SMC Global Power is aiming to double its existing power generating capacity to 6,000 megawatts in the next five years with the addition of 3,000 mw of new capacity.

The company owns three coal mining assets in Mindanao – Daguma, Bonanza and Sultan – which could produce 1,200 MW of electricity.

San Miguel also owns 10.1 percent of Australia’s Indophil Resources NL, which controls a third of the $5.2-billion Tampakan copper-gold project in Mindanao. The much-coveted Tampakan mine is touted as Southeast Asia’s richest untapped copper and gold deposit.

Indophil owns 37.5 percent of Sagittarius Mines Inc., the local company working on the Tampakan project in South Cotabato. Sagittarius is controlled by London-based global mining giant Xstrata Plc.

SMC Global Power is also eyeing power generating assets to be auctioned off by PSALM.

Among these assets are the 650-MW Malaya thermal power plant, Caliraya-Botokan-Kalayaan hydropower plants, Sucat thermal power plant and the Agus and Pulangui power plants.

The San Miguel group is already the biggest player in the country’s power generation sector with a production capacity of over 3,300 MW from the 1,200-mw Sual coal-fired plant, 600-MW Limay thermal facility, 340-MW San Roque hydro facility, and the 1,200-MW Ilijan natural gas-fired facility.