San Miguel sets follow-on offer dividend rate

San Miguel Corp. has set a 4.75% initial dividend rate for its plan to offer up to P20-billion preferred shares under its P40-billion Series 2 preferred shares program.

In an Oct. 8 letter to the Philippine Stock Exchange (PSE), San Miguel said it has authorized the issuance of the Series 2-J preferred shares to have a 4.75% initial dividend rate per annum.

If the preferred shares remain unredeemed by the date of its fifth anniversary, the dividend rate will be adjusted to the higher of the applicable initial dividend rate or the simple average of the closing per annum rates of the 10-year BVAL (Bloomberg Valuation Service) plus 5%.

San Miguel has applied for the shelf listing of up to 533.33 million Series 2 preferred shares with a par value of P5 each, which it intends to offer within a three-year period.

From this program, the company wants to offer up to 266.67 million Series 2 preferred shares for the first tranche, which will be composed of a base offering of 133.33 million Series 2-J preferred shares and an oversubscription option of up to 133.33 million shares. These have an offer price of P75 per share.

Based on an Oct. 1 disclosure by the PSE, San Miguel intends to start the offer period for the shares on Oct. 13, which will last until Oct. 19. Tentative listing date is on Oct. 29.

Assuming the full exercise of the oversubscription option, San Miguel expects to net P19.89 billion from the offering, which it will distribute to subsidiaries San Miguel Food & Beverage, Inc.; Petron Corp., SMC Global Power Holdings Corp.; San Miguel Holdings Corp.; and San Miguel Properties, Inc.

More specifically, the proceeds from the offering will support San Miguel’s P734-billion Bulacan airport project and the P62.7-billion Metro Rail Transit Line 7.

The company engaged BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., Philippine Commercial Capital Inc., PNB Capital and Investment Corp., RCBC Capital Corp., and SB Capital Investment Corp. as joint issue managers, lead underwriters, and bookrunners for the offering.

San Miguel booked an attributable net loss of P7.59 billion in the first semester, a turnaround of its attributable net income of P13.23 billion a year ago. The coronavirus pandemic particularly weighed on its fuel and beer businesses.

Shares in San Miguel at the stock exchange closed at P100 each on Friday, up 10 centavos or 0.10% from the last session. — Denise A. Valdez|BusinessWorld

Source: Peso Economics