SEC approves SMC Global Power IPO

By Zinnia B. Dela Peña (The Philippine Star) Updated September 30, 2011 12:00 AM


MANILA, Philippines - The Securities and Exchange Commission (SEC) has approved the initial public offering (IPO) of SMC Global Power Holdings Corp., the energy arm of diversifying conglomerate San Miguel Corp., that will raise from P12.76 billion to P27.335 billion.


Based on its amended prospectus, SMC Global Power is planning to offer 290 million to 385 million shares at a price range of P44 to P71 each.


This was lower than the 300 million to 500 million shares originally planned to be offered to the public.


Proceeds from the maiden offering of shares will be used to develop greenfield power projects, acquire existing power generation capacities, and for general corporate purposes.


Standard Chartered Securities (Singapore) Pte. Ltd. is SMC Global Power’s sole financial adviser as well as joint bookrunner and international manager along with Goldman Sachs Pte. and UBS AG.


On the other hand, ATR KimEng Capital Partners Inc. and SB Capital Investment Corp. will serve as domestic lead underwriters.


The company is the advanced stages of planning two clean-coal greenfield power projects with a combined capacity of 450 megawatts and is considering additional greenfield power projects with an aggregate capacity of up to 3,000 MW over the next five to seven years.


SMC Global Power is also preparing to bid for selected government-owned power generation plants scheduled for privatization as asset sales.


The company is also pursuing the vertical integration of its power business by capitalizing on changes in the regulatory structure to expand its sales of power to a broader range of customers, including retail customers. As part of the reorganization of the power related-assets of San Miguel, SMC Global Power acquired a 100-percent interest in San Miguel Electric Corp. which is in the process of obtaining a retail electricity license from the Energy Regulatory Commission.


Once open access and retail competition are implemented in December, the electricity supplier license will allow SMC Global Power to enter into offtake agreements with customers with power requirements of at least one MW.


SMC Global Power is now one of the largest power firms in the country, holding a 17.5-percent market share of the power supply of the national grid and a 23.5-percent market share of the Luzon grid.