SMC Global Power cleared to hold IPO

Manila Times.net
Published : Friday, September 30, 2011 00:00 Written by : Krista Angela M. Montealegre


SMC Global Power Holdings Corp. obtained regulatory approval to conduct what could be the Philippines’ biggest initial public offering after announcing it will spend P90 billion until 2016 for green field projects.
In its amended registration statement filed at the Securities and Exchange Commission, the wholly owned unit of San Miguel Corp. said it intends to raise between P24.71 billion and P36.90 billion from an upsized public offering of 348 million to 519.75 million shares.


SMC Global Power would raise between P12.76 billion and P27.34 billion from a base offer of 290 million to 385 million primary and secondary shares.


This is on top of an upsize option of 58 million to 77 million primary and secondary shares, which will be sold to domestic investors, as well as an over allotment option of 43.50 million to 57.75 million secondary shares.


The IPO shares will be sold at a price of up to P71 apiece.


As the selling shareholder, SMC will dilute its ownership in SMC Global Power to 67 percent, assuming the base offer as well as the green shoe and upsize options are fully exercised.


SMC Global Power intends to use net proceeds of up to P19.20 billion from the primary offer to partially finance its expansion plans and for general corporate purposes.


The company will allot up to P13.50 billion until 2015 for two 150-megawatt power plants in Ternate, Cavite and a 150-megawatt power facility in Northern Leyte. Both will be operational in the first quarter of 2015.


The remaining P5.70 billion that will be spent until 2016 will be earmarked for the Bulacan and Davao projects, acquisition of other power generation projects such as the Naga Power Plant Complex and the Unified Leyte Geothermal Power Plant, as well as for general corporate purposes.


SMC Global Power estimates that its aggregate capital expenditure for the development of the four green field projects will reach P90.4 billion, inclusive of the P9.3 billion and P26.3-billion capex for its fiscal year 2011 and 2012.


The company said the balance required to pursue these projects will be funded by third-party debt as well as cash from operating activities. The final amount of the third-party debt will be determined at the time of financing.


SMC Global Power is also contemplating on additional installed capacity at the planned facility in Cavite and the acquisition of existing power generation companies.


The expansion program is in line with its plan to expand its portfolio by up to 3,000 megawatts of new capacity nationwide over the next 10 years, depending on the market demand.


SMC Global Power has a capacity of 2,545 megawatts from its coal-fired plant in Sual, Pangasinan; a natural gas facility in Ilijan, Batangas; and a hydroelectric power plant in San Roque, Pangasinan.
The company’s offering may be the biggest on record since SM Investments Corp. raised about P28.8 billion in 2005.