Conglomerate San Miguel Corp. is raising P30 billion through the issuance of preferred shares mainly to refinance maturing US dollar-denominated obligations amid a weaker peso.
The P30-billion preferred shares offering forms part of the P73.16-billion worth of Series 2 preferred shares under shelf registration and approved by the board of directors of San Miguel in January.
San Miguel said in a registration statement filed with the Securities and Exchange Commission the initial tranche covered 280 million shares with an oversubscription of 120 million at an offering price of P75 per share.
San Miguel hired eight banks to handle the transaction. They are BDO Capital and & Investment Corp., China Bank Capital Corp., ING Bank, PNB Capital and Investments Corp., RCBC Capital Corp., SB Capital Investments Corp., Standard Chartered Bank and United Coconut Planters Bank.
The company did not indicate the timetable of the offering. San Miguel has scheduled an investors’ briefing about the preferred shares offering on Feb. 17.
“Proceeds of this offer will be principally used for the refinancing of existing US dollar-denominated obligations of the company and for other general corporate purposes,” San Miguel said.
The preferred shares will be listed with the Philippine Stock Exchange.
The local currency has been weakening against the dollar on the recovery of the US economy. The situation has made it more expensive for companies in the Southeast Asian nation to serve their dollar-denominated debt.
Economists from First Metro Investment Corp. and University of Asia and the Pacific earlier projected the peso might trade between 48 and 49 against the greenback this year, taking into consideration the volatility in the global financial markets.
San Miguel last year raised P33.5 billion also from the issuance of preferred shares at P75 apiece. The offering was five times oversubscribed, with the proceeds partly refinancing P54 billion of similar securities due that month.
San Miguel is one of the largest conglomerates in the Philippines by revenues and total assets, with sales of about 6.2 percent of the Philippine gross domestic product in 2014.
The conglomerate is broadly exposed to the Philippine economy through its diverse range of businesses spanning the beverage, food, packaging, fuel and oil, energy, infrastructure, telecommunication, property and banking industries.
San Miguel said it was well-positioned for significant future growth as its established businesses in beverage, food and packaging continued to provide stable cash flow, while new businesses had enabled the company to expand its ability to generate higher returns.