(Source: The Standard | 12 October 2016)
SM Investments Corp., the holding company of tycoon Henry Sy, allocated P13.67 billion to finance new investments and strategic acquisitions particularly in the retail and property sectors.
SM Investments said in a document filed with the Securities and Exchange Commission regarding the planned issuance of P20 billion seven-year fixed-rate bonds that it had identified potential investments and acquisitions that were in the early stages of evaluation.
“The issuer [SM Investments] intends to use P13.67 billion of the proceeds from the offer to finance future investments and strategic acquisitions. Part of the strategies of the issuer is to maintain its leading market share in its retail and property business segments by diversifying and expanding the businesses of the group,” SM Investments said.
“The issuer intends to accomplish this by continuing to expand the group’s mall and retail activities into major centers of population in Metro Manila and particularly in the provinces where there are opportunities for growth, capturing strategic opportunities overseas, developing opportunities in the property development, tourism and leisure sectors, where it believes there are significant opportunities for growth as the Philippines becomes a more attractive tourist destination,” it said.
The planned investments and acquisitions will depend on the results of the evaluation and due diligence, it said.
SM Investments said it expected to complete the deals by the fourth quarter of 2016 to the second quarter of 2017.
The conglomerate recently completed the consolidation of all retail businesses under unit SM Retail Inc.
SM Investments said was allotting P6.15 billion from the planned P20-billion bond offering to repay short-term loans with three banks, including BDO Unibank, Mizuho Bank Ltd. and HSBC.
SM Investments said it expected to finalize the bonds offering in December.
The P20 billion bond offering represents the first tranche of the P50-billion. fixed-rate bond shelf registration earlier filed by SM Investments with SEC.
SM Investments saw its net income climb 11 percent in the first half to P15 billion from P13.5 billion a year ago, on the strong performance by banking, property and retail businesses.
SM Investments chief finance officer Jose Sio said the company would likely sustain its positive performance for the rest of the year on favorable economic condition.
First-half revenues increased 8.5 percent to P151.1 billion from P139.2 billion in the same period last year.
– By Jenniffer B. Austria