Food-to-infrastructure giant San Miguel Corp. (SMC) has listed close to P49 billion worth of preferred shares at the Philippine Stock Exchange (PSE), the first-ever preferred share exchange offer by a private company alongside a public offer in the country.
SMC’s P18.86-billion exchange covered its Series 2-P, 2-Q and 2-R preferred shares, allowing holders of its Series 2-J and 2-K shares to swap their investments.
The switch, however, was done on a one-for-one basis, instead of waiting for redemption in the future.
SMC said the exchange provides investors with greater flexibility and liquidity. It also introduces another innovation in a capital market that is traditionally limited to straightforward redemptions.
A total of 251.47 million shares were tendered during the exchange, composed of 173.76 million Series 2-J and 77.71 million Series 2-K shares. SMC still has 92.91 million Series 2-J and 106.19 million Series 2-K shares for redemption on Oct. 29 and Dec. 10, respectively.
Likewise, SMC launched a public offer of preferred shares worth P30 billion, made up of Series 2-S, 2-T and 2-U.
The offer is divided into P20 billion in base offer and P10 billion in oversubscription option, of which shares are priced at P75 a piece and which was fully subscribed.
SMC said the twin offer forms part of the conglomerate’s strategy to prepare its capital structure for long-term growth.
SMC said it wants to give investors more platforms wherein they can participate in its growth. SMC is one of the country’s largest conglomerates, with investments in industries considered critical to national development.
SMC will use the proceeds from the twin offer to refinance its short-term loans. It will also spend part of the gains for big-ticket projects, including the upgrade of the Ninoy Aquino International Airport (NAIA) and the construction of the New Manila International Airport (NMIA).
SMC’s project book is piled with capital-intensive projects like the P735.63-billion undertaking to put up the country’s largest airport, the NMIA, and the P170.6-billion rehabilitation of NAIA.
SMC handles some of the country’s biggest tollways such as the Subic-Clark-Tarlac Expressway and Skyway System, and is also engaged in food production and power generation, among others.