San Miguel gets SEC okay to hike capital to P30 B

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. has obtained the Securities and Exchange Commission’s nod to raise its authorized capital to P30 billion from P22.5 billion.

The new capitalization comprises 3.79 billion common shares, 1.11 million Series 1 preferred shares and 1.1 million Series 2 preferred shares , all with a par value of P5.

The Series 2 preferred shares are convertible into common shares, with its holders are entitled to receive cash dividends at such rate or amount as the board shall fix.

San Miguel kicked off last month its P80.025-billion preferred share offering, the largest capital-raising program ever in the local market. The share sale, which was closed Sept. 14, was a huge success as it offered returns that are 60 percent higher than similar-dated government bonds.

Proceeds from the offering will be used by San Miguel to redeeem preferred shares held mostly by the government and pay dividends of 7.5 percent to eight percent on the shares, which are callable in five to 10 years.

San Miguel aims to hit $30 billion in sales by 2017 from a target $20 billion this year mainly due to acquisitions.

The conglomerate has spent at least $3 billion since 2007 for its masssive diversification into faster-growing and heavy industries such as energy, telecoms, mining, banking and infrastructure.

San Miguel owns Petron Corp., the country’s largest oil company. Its flagship unit San Miguel Brewery Inc., part-owned by Japanese brewer Kirin Holdings Co., controls more than 90 percent of the Philippine beer market.

The group also recently ventured into the airline business through the purchase of a 49-percent stake in flag carrier Philippine Airlines and budget carrier affiliate Air Philippines. Its other investments include stakes in power utility giant Manila Electric Co. and Indophil Resources NL, which has an indirect stake in the Tampakan gold and copper mine in southern Philippines.