SMC eyes sale of additional $1-B preferred shares

MANILA, Philippines - San Miguel Corp., the diversified conglomerate, may again sell preferred shares to raise as much as $1 billion before the end of the year and use the proceeds for refinancing. 

According to Bloomberg, SMC president Ramon Ang said the company could still do a sale this year to trim its dollar debt on the back of a weak peso.

He said a lot of investors are looking to buy more preferred shares.

Last September, San Miguel successfully raised P33.5 billion in a preferred share sale amid strong interest from investors.

The underwriters that handled San Miguel’s share sale said investors found the rates attractive as well as the step-up component of the dividend rate.

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 rates of San Miguel’s latest preferred share sale were as follows: 5.9431 percent for the five year Subseries 2-D; 6.3255 percent for the seven year Subseries 2-E and 6.8072 for the 10-year Subseries 2-F.

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

The offering consisted of 446,667,000 preferred shares at P75 per piece.

San Miguel used the proceeds of the latest share sale also for refinancing.

During the company’s 125th anniversary, Ang said the company hopes to bring its yearly consolidated revenues to $40- to $50-billion in the next five years from an estimated $20 billion at present.