SEC OKs San Miguel, Ayala Land Fundraising Plans for Next 3 Years

San Miguel Corporation

The Securities and Exchange Commission has given conglomerate San Miguel Corp. and property developer Ayala Land Inc. leeway to pursue big-ticket fundraising activities worth a total of P123 billion for the next three years.

This allows SMC to immediately launch the offering of an initial tranche of up to P30 billion worth of preferred shares.  Separately, ALI can proceed with an initial offering of 10-year bonds worth up to P8 billion to boost funds for the redevelopment of the defunct hotel Intercon hotel area and the Ayala Triangle Garden.

Based on official documents, the SEC had approved a plan by SMC for the shelf registration of up to P73.2 billion worth of preferred shares. Likewise approved was ALI’s proposed shelf registration of up to P50 billion worth of debt securities.

Shelf registration allows an issuer to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use up right away.

The SEC gives the issuer a three-year window to tap the shelf registration.

SMC, for its part, was authorized to sell up to 975.57 billion preferred shares at P75 per share under the shelf registration process.  The initial offering is worth P30 billion consisting of up to 400 million preferred shares, including an option to upsize by 120 million preferred shares in case of strong demand.

Based on regulatory filings, the conglomerate plans to use P20 billion in expected proceeds from the first tranche to refinance existing US dollar-denominated debt obligations.  SMC also intends to infuse equity in existing businesses such as SMC Global Power Holdings Corp., San Miguel Holdings Corp., Vega Telecom and San Miguel Properties Inc.  The balance will be used for general corporate purposes.

The new series of preferred shares will have three sub-series whose dividend rates will be based on five-, seven-, and 10-year local interest rate benchmarks.

SMC has mandated the following as lead underwriters and bookrunners for this transaction: BDO Capital & Investment Corp., China Bank Capital Corp., ING Bank, PNB Capital and Investment Corp., RCBC Capital Corp., SB Capital Investment Corp., Standard Chartered Bank and United Coconut Planters Bank.  Each of these banks has committed to raise P2.62 billion for the conglomerate. Bank of Commerce was tasked as a selling agent.

ALI’s shelf registration gives it the leeway to offer debt securities in the form of commercial paper, “Homestarter” bonds and fixed-rate bonds.

The initial tranche of P8 billion will be in the form of fixed rate bonds due 2026.