SMC raises P33.5 B from sale of shares

MANILA, Philippines - Diversified conglomerate San Miguel Corp. successfully raised P33.5 billion from a preferred share sale on strong interest from investors, one of the lead underwriters that handled the transaction said yesterday.

“It was oversubscribed. The demand was at least double,” ING Bank Philippines president and CEO Consuela Garcia said in an interview.

 She said investors were already snapping up the shares even before the official start of the sale period.  The offering involved 446.67 million shares priced at P75 apiece.

Preferred shares refer to a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. They generally have a dividend that must be paid out before dividends to common shareholders but the shares usually do not carry voting rights.

The dividend rate of the preferred shares are 5.94 percent for the five-year subseries 2-D, 6.32  percent for the seven- year subseries 2-E and 6.8 for the 10-year subseries 2-F.

The dividend rate comes with a step-up sweetener, which means the rate will be adjusted if they are not redeemed on their respective redemption dates.

San Miguel’s series 2 preferred shares are cumulative, non-voting, non-participating and non-convertible peso-denominated preferred shares.

The shares will be listed at the Philippine Stock Exchange on Sept. 21.

Proceeds from the share issuance would be used to fund the redemption of its outstanding sub series 2-A preferred shares amounting to P54 billion, callable on Sept. 21.

Among the lead underwriters for the offering were BDO Capital & Investment Corp., BPI Capital Corp., China Banking Corp., The Hongkong and Shanghai Banking Corp. Ltd., PNB Capital and Investment Corp., RCBC Capital Corp., SB Capital Investment Corp. and Standard Chartered Bank.