San Miguel Corp to raise over P30 billion

San Miguel Corporation plans to raise up to P33.5 billion ($740.80 million) by issuing preferred shares.

San Miguel has invested about P450 billion ($9.95 billion) over the past 7 years in new ventures and expansion of existing core businesses.

Company representatives told the Philippine Stock Exchange on July 14 that its board of directors had approved the issuance and sale of 446.447 million Series 2 Preferred Shares at a price of P75 ($1.67) per share.

Companies issue preferred shares to raise funds to finance upcoming projects, expansion, and other high costs associated with operations.

The preferred shares, which will be issued in 3 sub-series, will be registered with the Securities and Exchange Commission and will be listed with the local bourse.

“For these purposes, the Board has authorized the engagement of the services of underwriters, advisors, legal counsels, stock and transfer agent, receiving agent/bank, and other agents as may be necessary, proper or desirable to effect the offering,” San Miguel said.

No other details were provided, including timetable and use of proceeds.

San Miguel has invested about P450 billion ($9.95 billion) over the past 7 years in new ventures and expansion of existing core businesses. Last month, the diversified conglomerate said it may raise more funds through issuance of preferred shares, depending on market opportunities.

During the company’s stockholders meeting, San Miguel obtained shareholders’ approval to reclassify 810 million Series 1 preferred shares to Series 2 and its subsequent re-issuance in whole or in part.

In April San Miguel raised P21 billion ($464.40 million) from re-issuance of 279.41 million of the Series 1 preferred shares at P75 ($1.66) per share to 3 firms, namely Gingoog Holdings Corporation, Lucena Holdings Corporation, and Metroplex Holdings Corporation.

The company is currently in expansion mode and has been bidding in various infrastructure projects.

It also recently expressed interest in bidding for the government’s stake in United Coconut Planters Bank.

In 2014, San Miguel also reported that its net income fell 45% in 2014 to P28.1 billion ($621.45 million) from P50.7 billion ($1.12 billion) posted in 2013.

Its 2013 net income included P40 billion ($884.57 million) in a one-time gain from the sale of the company’s stake in Manila Electric Company.

On the recurring net income basis, San Miguel posted a 244% hike in net income to P27.9 billion ($616.99 million).