SMC buying back $200-M bonds

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) is trimming anew its debts through the buyback of more than $200 million worth of bonds.

In a disclosure, SMC said its board of directors “confirmed and ratified the redemption of the remaining balance amounting to $212.8 million of the corporation’s $600 million exchangeable bonds.”

In February, the food-to-power conglomerate spent $280.612 million to redeem $259 million worth of exchangeable bonds and pay accrued interest.

Early this year, 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 due May 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 to Apr. 28, 2014. Shares of SMC closed at P81.65 each on Apr. 28.

As of end-March, SMC had P348.74 billion in current liabilities which are due in the next 12 months, up from P335.54 billion in end-2013. Of these, P149.5 billion are loans payable, down from P143.22 billion in end-December.

In the first quarter, foreign exchange losses dragged the income of diversified conglomerate SMC even as it posted higher revenues in the first quarter.

Net income attributable to equity holders of the parent company was nearly halved to P2.2 billion in January to March compared with P4.2 billion year-on-year. Without the foreign exchange losses, SMC’s net income was at P4 billion, 23 percent higher than the comparable income for the same period last year.

SMC is into power (SMC Global Power Corp.), brewery (San Miguel Brewery Inc.), packaging (San Miguel Yamamura Packaging Corp.), liquor (Ginebra San Miguel Inc.), petroleum (Petron Corp.), food and beverage (San Miguel Pure Foods Co. Inc.), airline (Philippine Airlines) and infrastructure projects nationwide.