SMIC on lookout for new investments, acquisitions

MANILA, Philippines – SM Investments Corp. (SMIC) is on the lookout for  investments and potential acquisitions.

The company is particularly interested in increasing its stake in its affiliate banks – BDO Unibank Inc. (BDO) and China Banking Corp. (China Bank).

Funding for these potential acquisitions will come from the company’s initial tranche of up to P20 billion in seven-year bonds to be issued this year.

The company has obtained the green light from the Securities and Exchange Commission (SEC) to issue the bonds, which are part of a P50 billion issue filed under the SEC’s shelf registration facility.

“These investments may take the form of additional equity investments in businesses complementary to the core businesses of the group. It may also invest a portion of the net proceeds in its subsidiaries and affiliates to maintain its existing effective ownership stake should the need arise. The issuer is also considering increasing its investments in associated companies in the financial services businesses as these banks continue to build on their strong business franchise and further strengthen their capabilities to support future growth and actively respond to strategic opportunities and market challenges,” SMIC said in its registration statement filed with the SEC.

Net proceeds from the issue are estimated at P19.8 billion which includes an oversubscription option of P5 billion and which would be disbursed with in the fourth quarter of 2016 or up to the end of the second quarter of 2017.

Of the P15 billion, P6.15 billion would be used for debt refinancing and P8.716 billion would be allocated for investments and acquisitions, SMIC said in its registration statement.

If the oversubscription option of P5 billion is utilized, an additional P4.960 billion would also be used for the company’s strategic investments.

The move is part of the company’s strategy to maintain its market share in its retail and property business segments by diversifying and expanding the businesses of the group.

“The issuer intends to accomplish this by continuing to expand the group’s mall and retail activities into major growth centers of population in Metro Manila and particularly in the provinces where there are opportunities for growth, capturing strategic opportunities overseas developing opportunities in the property development tourism and leisure sectors where it believes there are significant opportunities for growth as the Philippines becomes a more attractive tourism destination,” SMIC said.