Author Topic: SMC to Raise P60 B Through Pure Foods for Group Expansion  (Read 1227 times)

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SMC to Raise P60 B Through Pure Foods for Group Expansion
« on: April 26, 2012, 12:48:47 AM »
SMC to Raise P60 B Through Pure Foods for Group Expansion By JAMES A. LOYOLA
September 16, 2010, 8:07pm

MANILA, Philippines – San Miguel Corporation is planning to raise P60 billion before the end of the year, to fund its foray into new businesses, by leveraging its food and beverage subsidiary San Miguel Pure Foods Company.

In a text message, SMC president Ramon S. Ang said they intend to launch the sale of P50 billion worth of Pure Foods preferred shares and P10 billion in bonds of Pure Foods subsidiaries by December.

Pure Foods has informed the Philippine Stock Exchange that it is raising funds for expansion and participation in high-yielding investments being pursued by parent company SMC, such as power generation or transmission, water and other utilities, and infrastructure.

To do this, Pure Foods is reclassifying up to 75 million common shares into non-voting, cumulative and non-participating preferred shares with other features still to be determined by management.

It will the issue preferred shares with a total issue size of up to P50 billion, under terms and conditions to be determined by management. The preferred shares will be listed “at the appropriate exchanges.”

Pure Foods units such as San Miguel Foods Inc., San Miguel Mills Inc. and other subsidiaries with financial capability, will also issue some P10 billion worth of fixed rate long term bonds.

The firm intends to amend its articles of incorporation to allow the reclassification of shares as well as the denial of pre-emptive rights of sharesholders for the issuance.

SMC has shifted its plans to raise funds through Pure Foods after ending negotiations for the sale of a 49 percent stake in the unit since final bidders wanted to buy 100 percent while SMC wanted to retain majority control.

Prior to the announcement of the P60 billion preferred share and bond issuance, SMC’s board had approved the option to sell up to a 49 percent stake in SMPFC through a secondary public offering.

SMPFC that owns the Purefoods, Magnolia, Monterey, Star, San Mig Coffee, and B-Meg brands.

Ang said the firm is worth around $1.8 billion although recent estimates put the bid price at around $2 billion. Pure Foods has a market capitalization of P57.5 billion ($1.24 billion)

Profit will probably rise as much as 15 percent this year as revenue grows about 10 percent to P83 billion, President Francisco Alejo forecast on May 14. Pure Foods, which has a Philippine venture with Hormel Foods Corp., had record earnings of P2.6 billion in 2009 on P75.04 billion sales.

First-quarter profit at Pure Foods, which also makes ham, coffee, margarine and animal feed, rose to P872 million from P143 million. Sales rose 2 percent to P18.2 billion.

“They may be going into this to replace what San Miguel would have raised from the stake sale,” said Allan Yu, who helps manage 260 billion pesos at Metropolitan Bank & Trust Co. in Manila. Pure Foods “seems to be going into the same businesses that the parent wants to go into.”

The company that controls the brewer of San Miguel Beer last month ended talks to sell Pure Foods after the Manila-based Campos family and partner Century Pacific Group refused to settle for an acquisition of a minority stake, according to people with knowledge of the matter.

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SMC to Raise P60 B Through Pure Foods for Group Expansion
« on: April 26, 2012, 12:48:47 AM »

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