Top Frontier Holdings Inc., the parent company of conglomerate San Miguel Corp., said Tuesday it issued P51.08 billion worth of redeemable preferred shares to Far East Holdings Inc., a private company owned by the family of businessman Ramon Ang.
Ang, who is also the president and chief executive of San Miguel Corp., together with his son John Paul, did not participate in the board approval of the redeemable preferred shares issuance. This followed FEHI’s sale of 4.4 billion shares, or equivalent to 88.5-percent stake in Eagle Cement Corp. to San Miguel for more than P97 billion in November.
FEHI has investments in real property, construction, operation and management of hotels.
Top Frontier said in a disclosure to the stock exchange Tuesday it issued P15.3-billion Series A, P11.15-billion Series B and P24.63-billion Series C of redeemable, non-voting preferred shares.
Redeemable preferred shares contain a call option that allows the issuer to buy back the stock at a certain price.
Top Frontier said, however, the preferred shares have no fixed redemption date and are subject to a coupon rate of 6.25 percent per annum for Series A and Series B and 6.5 percent per annum for Series C.
It said it would use the proceeds from the preferred shares offering for debt-liability management, including payment of obligations and redemption of preferred shares.
TFHI said the issuance would have no effect on the ownership and capital stock structure of the company.
“In view of the nature of the redeemable preferred shares, the ownership structure and capital stock structure of the company shall remain the same, before and after the redeemable preferred shares issuance,” it said.
The company said the transactions were implemented on an arm’s length basis and duly approved by the board of directors on Dec. 22.
“Mr. Ramon S. Ang and Mr. John Paul L. Ang inhibited themselves from and did not participate in the discussions and voting for the approval of the transactions during such board meeting,” TFHI said.
SMC, which undertakes major infrastructure projects such as a new international airport in Bulacan province, expressways and mass rail transits, earlier said the acquisition of Eagle Cement would complement its investment strategy in the cement industry, increase its foothold in the cement business and provide the opportunity to implement its plan to expand the business.
San Miguel said core income rose 26.5 percent in the first three quarters to P43.5 billion from P34.4 billion a year ago as consolidated revenues jumped 71 percent to P1.1 trillion.