Philippines: San Miguel Corp. considering $500 million bond

Food and beverage giant San Miguel Corp. will be active in raising capital this year through both the debt and the equity markets, even after it had sold its interest in Singapore-listed Del Monte Pacific Ltd. and Coca- Cola Bottlers Philippines, Inc., or CCBPI, Business World (Philippines) reported May 10.

San Miguel President and Chief Operating Officer Ramon S. Ang told reporters yesterday the listed company is "considering" reviving the issuance of hybrid perpetual bonds to raise at least $500 million. "We will try...we are considering," he said, after the annual stockholders' meeting of Ginebra San Miguel, Inc.

Last year, the company decided to postpone the proposed offering of preferred shares by its wholly-owned subsidiary, San Miguel Capital Funding Ltd.

The largest publicly listed food, beverage and packaging company in Southeast Asia will spin off its domestic beer business which will likely do an initial public offering (IPO) this year together with the regional packaging business.

San Miguel Beer Domestic will become a wholly-owned subsidiary under San Miguel. The board of directors has secured board approval for its beer business to enter into a strategic partnership with Kirin Brewery Company, Ltd., which has a 20% stake in San Miguel.

San Miguel Senior Vice-President and Chief Financial Officer Ferdinand K. Constantino said the company would seek approval from its stockholders in their next annual meeting in July 24.

"We have not formed out any detail of the listing; it will take a lot of time. We will need some independent advisors also. As soon as those details are available, we will ask our board to review and approve them," he said.

Mr. Ang said earlier that the stand-alone domestic brewing and packaging operations would enhance these firms' ability to compete more effectively in their industries.

San Miguel will increase its authorized capitalization to 7.5 billion shares equivalent to P37.5 billion at par value from the current 4.5 billion to fund the group's acquisitions and expansion into other businesses, as well as pay down debts and finance possible share buy-back. The company said earlier this would enable it to issue 1.5 billion preferred shares as part of the capital-raising exercise.

It plans to venture into other fields, namely: power, mining, infrastructure, water, and other utilities to tap new engines of growth.

San Miguel Chairman Eduardo M. Cojuangco, Jr. said the firm wants to keep a majority control of at least 51% of its business ventures. "We have said a long time ago that we want to be responsible in determining the future of the company we run," he said. "We like to concentrate on big item things so we get away from businesses where small capitals are just required to get into it."

Amid diversification, Mr. Ang said, "We are still going to concentrate on existing businesses."

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