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MANILA - San Miguel Corp. has received regulatory approval to raise P80.025 billion from the sale of preferred shares to local investors next week.
Documents from the Securities and Exchange Commission showed the diversifying conglomerate will offer 1.067 billion Series 2 preferred shares at P75 apiece.
Preferred shares offer a higher dividend rate than common stocks, and usually carry no voting rights.
The SMC offering consists of 960 million preferred shares with an oversubscription option of 107 million. The preferred shares may be issued in up to three subseries at the discretion of the company.
The shares will be issued upon SEC approval of the increase in authorized capital stock to P30 billion. They will be listed and traded on the first board of the Philippine Stock Exchange.
The Hongkong and Shanghai Banking Corp. was tapped as the sole issue manager. Joint bookrunners are HSBC, Union Bank of the Philippines, BDO Capital & Investment Corp., China Banking Corp., RCBC Capital Corp., First Metro Investment Corp., ING Bank N.V.-Manila Branch, Philippine Commercial Capital Inc., Standard Chartered Bank, SB Capital and Investment Corp. and United Coconut Planters Bank.
SMC will use net proceeds of P78.45 billion to refinance the existing P72.8 billion Series 1 preferred shares and for general corporate purposes, which may include the partial payment of short-term debt of P13.995 billion.
SMC will embark on the share sale to institutional and retail investors from August 13 until September14.
The food and beverage giant will file the Amended Articles of Incorporation and Certificate of Increase in Capital Stock no later than September 14.
Listing and trading of the shares at the PSE starts on October 12.
The dividend rate of each subseries will be available after the completion of the book building process. If cash dividends are declared by the SMC board on the preferred shares, they will be at the annual fixed rates of 7.5 percent for Series 2-A, 7.625 percent for Series 2-B and 8 percent for Series 2-C.
In April, the SMC board approved an increase in the company's authorized capital stock from P22 billion to P30 billion by adding 400 million common shares and creating 1.1 billion Series 2 preferred shares, which are cumulative, non-voting, non-participating and non-convertible.
Once approved by the SEC, the conglomerate will have an authorized capital stock of P30 billion consisting of 3.79 billion common shares, 1.11 billion Series 1 preferred shares and 1.1 billion Series 2 preferred shares all with a par value of P5 apiece.
In June, SMC shareholders approved the issuance of the preferred shares and the capital stock hike.
SMC has been trimming its stake in its traditional businesses of food, beverage and packaging since 2007 to support its diversification into infrastructure, power, oil retailing, telecommunications and mining.
It recently entered the airline business through the acquisition of a significant stake in Philippine Airlines.
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