San Miguel power unit defers IPO

Manila Times.net
Published : Wednesday, October 12, 2011 00:00 
Written by : KRISTA ANGELA M. MONTEALEGRE REPORTER


THE holding company for San Miguel Corp.’s power-sector assets pushed back to next year what could have been the Philippines’ biggest maiden share sale because of volatile market conditions.


“Please be advised that given the current market volatility, SMC Global Power Holdings Corp. has decided to defer the initial public offering of its common shares at this time,” Warren Sy, SB Equities Inc. president, said in a statement.


SB Equities is an affiliate of SB Capital Investments Corp., the underwriter of the IPO.


The “adverse market conditions” prompted SMC Global Power to defer the offering, which may be conducted “sometime next year,” according to a source with knowledge of the matter.


The SMC unit recently obtained the approval of the Securities and Exchange Commission 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 the power subsidiary 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 is 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 fiscal years 2011 and 2012.


The company’s IPO may be the biggest on record since SM Investments Corp. raised about P28.8 billion in 2005.


SMC shares were unchanged at P114 each on Tuesday.