SMC sets Oct. 1 redemption for P20-B preferred shares

ANG-LED conglomerate San Miguel Corp. (SMC) will redeem its Series 2-J preferred shares on Oct. 1 at P75 each, plus unpaid dividends, covering more than 266 million shares.

In a disclosure to the stock exchange on Wednesday, SMC said its board of directors approved the redemption of 266.67 million Series “2” Preferred Shares-Subseries J during its Aug. 7 meeting.

The company said the move forms part of its strategy to manage its preferred shares portfolio and meet upcoming redemption obligations.

“Upon redemption, the SMC2J Preferred Shares shall not be considered retired and may be re-issued by the corporation,” it said.

SMC said the redeemed shares will be removed from trading and may be reissued subject to regulatory approval.

“This redemption gives a glimpse of its financial health, showing its ability to fund the redemption of roughly P20 billion worth of preferred shares,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“It also opens the idea of possibly tapping into cheaper funding or reallocating resources toward other projects and ventures, while at the same time streamlining its capital structure and easing dividend obligations,” he added.

Mr. Limlingan noted that SMC has no history of defaulting on its obligations.

Separately, SMC is seeking to raise up to P30 billion through an offering of Series 2 preferred shares priced at P75 each, with an oversubscription option of up to P10 billion. The issue will consist of around 266.67 million shares across three subseries (2-S, 2-T, and 2-U).

Proceeds will be used to refinance and redeem existing debts and preferred shares, including Series 2-F, and to repurchase other preferred shares such as Series 2-J and 2-K. Funds will also be allocated to major infrastructure projects, including the Bulacan airport and tollway developments.

SMC shares rose 0.09% to P58.05 each on Wednesday. — Alexandria Grace C. Magno