SMIC’s P50-B bond issue, Shakey’s P5.5-B IPO get SEC nod

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THE Securities and Exchange Commission (SEC) on Friday approved the P50-billion fixed-rate bond issue of SM Investments Corp’s (SMIC) under its shelf registration program.

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The corporate regulator also gave the green light to Shakey’s Pizza Asia Ventures Inc’s (SPAVI) P5.5-billion initial public offering (IPO).

SMIC is seeking to raise P50 billion in the debt market via the issue of fixed-rate bonds in a span of three years, mainly to fund future investments and strategic acquisitions.

The initial tranche will be composed of P20 billion worth of seven-year bonds — P15 billion as the base offer and P5 billion under an oversubscription option. The bonds will be offered to the public from November 23 to 29, and are set to be issued on December 7.

SMIC will announce the final yield rate of the initial tranche sometime this month.

“Net proceeds of the issue of approximately P14.866 billion, assuming an issue size of P15 billion, or P19.826 billion if the oversubscription option is exercised, shall be used to finance investments and strategic acquisitions,” SMIC said in its prospectus.

The Sy-led conglomerate said 70 percent of the net proceeds will be disbursed from the fourth quarter of 2016 to the first quarter of 2017, while the rest will be utilized up to the end of the second quarter of 2017.

The balance, or P30 billion worth of bonds, will be issued in several tranches within three years.

Meanwhile, Shakey’s intends to sell in its IPO up to 352 million primary and secondary shares, including 46 million shares in case of oversubscription, at a maximum price of P15.58 each.

The offer price is expected to be finalized later this month ahead of a targeted listing in December.

This will be the fourth IPO for 2016 after Golden Haven Memorial Park Inc’s P778 million IPO in June, Cemex Philippines Holdings Corp. in July (P25 billion), and Pilipinas Shell Petroleum Corp. last November 3 (P18.425 billion).

Deutsche Bank AG was appointed as the sole global coordinator and bookrunner for the transaction, with BDO Capital and Investment Corp. and First Metro Investment Corp. as joint lead managers and underwriters. Evercore is acting as exclusive financial adviser to SPAVI.

More than 80 percent of the IPO proceeds will be used to repay debts while the rest will be allotted for capital expenditures and potential acquisitions.

In order to proceed with the IPO, SPAVI still has to secure approval from the Philippine Stock Exchange.

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