SMC plans P10-B bond issuance

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DIVERSIFIED conglomerate San Miguel Corp. (SMC) plans to raise up to P10 billion from the issuance of five-year bonds by October.

SMC Senior Vice-President and Treasury Head Sergio G. Edeza said they will conduct the offer by late September or early October. The bonds will likely have a tenor of five years, the proceeds of which will be used to refinance existing debt.

“There’s a maturing preferred, so we can use it to refinance. The balance, we can use for refinancing for redenominating certain dollar debt but this is only a small issuance,” Mr. Edeza told reporters on the sidelines of the United Nations Global Compact-Global Reporting Initiative Summit in Pasay Tuesday.

This will be the last tranche of SMC’s P60-billion shelf registration filed with the Securities and Exchange Commission in 2017. Mr. Edeza said they are still awaiting approval for the permit to sell before starting the offer.

The company will hold a briefing for institutional investors on Thursday, Aug. 22, for the issuance.

Asked if they are planning another shelf registration, Mr. Edeza said this will depend on their financing needs.

“There will always be requirement for financing…we have to assess our financing program, and whatever is the need, if there’s a need for shelf (registration), then we will file,” Mr. Edeza said.

SMC was recently awarded the P734-billion Bulacan International Airport project. It will now supervise the project’s financing, design, construction, supply, completion, testing, commissioning, and operation and maintenance.

The Department of Transportation (DoTr) said it expects the company to begin construction by the fourth quarter of the year.

Mr. Edeza declined to disclose details on the Bulacan airport’s financing as they have yet to receive a formal notice from the government.

San Miguel Holdings Corp., SMC’s unit that will handle the project, must submit documentary requirements such as its performance bond and letters of credit from a bank to the DoTr Special Bids and Awards Committee within 20 days after receiving its notice of award.

The Bulacan airport, also known as the New Manila International Airport, is seen to serve as an alternative to the Ninoy Aquino International Airport. It will have four to six parallel runways projected to have an annual capacity of 100 million passengers.

The company has engaged three foreign firms to design and build the project, namely Groupe ADP (Aeroports de Paris), Meinhardt Group and Jacobs Engineering Group.

SMC’s net income attributable to the parent rose 38% to P7.52 billion in the second quarter of 2019, even as sales slipped 2% to P258.57 billion.

For the first half, attributable profit grew 3.5% to P13.23 billion, while sales added 2% to P509.495 billion. — Arra B. Francia