SMC terminates half of $600-M bonds

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) has terminated nearly half of the $600-million bonds it bought back from lenders.

“The principal amount of the bonds amounting to $60 million have been cancelled effective on March 23,” SMC said in a disclosure. “The outstanding principal amount of the bonds after the said cancellation is $259 million,” it added.

Early last month, the conglomerate spent roughly $300 million to buy back $259 million bonds, which forms part of the company’s debt refinancing project.

“The aggregate cash amount paid by the company based on the aggregate principal amount of the bonds repurchased, as well as accrued but unpaid interest payable on Feb. 7 is $280.612 million,” SMC earlier said.

In January, SMC announced its plan to buy back $600 million worth of convertible bonds listed on the Singapore Exchange Securities Trading Ltd. as part of its liability management program.

SMC said the bond buyback is in line with the board of directors’ approval authorizing the management “to refinance its existing financial obligations under such terms and conditions which are favorable and advantageous to the company.”

In May 2011, SMC allotted 189.12 million common shares from its treasury stock for the $600 million exchangeable bonds that are due on May 5, 2014.

Holders of the bonds, which carry an interest rate of two percent, may exchange the bonds into common shares worth P137.50 each from June 15, 2011 up to April 28, 2014.

Net income attributable to equityholders of the parent company surged 57 percent to P27.6 billion last year. In 2011, SMC profits sank 13 percent to P17.5 billion absent non-recurring gains.

Consolidated net income before minority interest jumped 35 percent to P38.6 billion on higher gains from the other investments and favorable foreign exchange rates.