SMGBY | Quote | Chart | News | PowerRating -- AFTER failing to hit its target for a recently concluded share-swap program, San Miguel Corp. (SMC) said its board approved the issuance of more preferred shares for possible sale to unnamed private groups. In a disclosure to the Philippine Stock Exchange, SMC said its board gave the nod to the issuance of up to 226.8 million series one preferred shares.
"The company is still in discussions with the prospective investors on the terms of the issuance. We will make appropriate disclosures as soon as an agreement has been reached," Ferdinand Constantino, SMC corporate information officer said.
The conglomerate said the proceeds of the share sale will be used to finance investments and acquisitions.
The company has been diversifying into heavy industries and services, including power distribution and generation, oil refining, infrastructure and telecoms.
It has investments in Petron Corp., Manila Electric Co. (Meralco), Liberty Telecommunications Holdings Inc. and a consortium that will put up the Tarlac-Pangasinan-La Union Expressway.
SMC also formed a joint venture with state-run Metropolitan Waterworks and Sewerage System to build the Laiban Dam.
The company earlier reported that at end-June, it had over a billion pesos in debt maturing in less than a year. Based on its second quarter financial statements, the company's long-term debt amoun-ted to 19 percent of its total equity, down from about 24 percent in the same period last year.
Earlier, the conglomerate concluded its offer to shareholders to exchange their common shares with preferreds.
A total of more than 476 million class A common shares and more than 396 million class B common shares have been converted to series one preferred shares.
The more than 873-million common shares were short of the target of up to 1.1 billion, representing a 35-percent block in the company's total outstanding stock.
The preferreds were priced at P75 apiece with the payout ratio at 8-percent per annum.
Included in the converted 873-million common shares were the 24 percent or more than 753-million shares the government holds through Coconut Industry Investment Fund and its holding companies.
Preferred shareholders have a higher claim on earnings than common stockholders, but the former have no voting rights.
Ramon Ang, SMC president and chief operating officer, had said the share swap option was meant to address shareholder concern over the company's new businesses.
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