The Securities and Exchange Commission approved the P15-billion maiden bond offering of San Miguel Food and Beverage Inc., the food and beverage subsidiary of San Miguel Corp.
The SEC said SMFB would offer P15 billion of fixed-rate bonds in two series at face value. The Series A Bonds will mature in five years while the Series B Bonds will be repaid seven years from the issue date.
San Miguel Food will issue the bonds in minimum denominations of P50,000 each and in integral multiples of P10,000 thereafter. They will be listed and traded in denominations of P10,000 on Philippine Dealing & Exchange Corp.
The company plans to use the net proceeds from the offering to fund the redemption of outstanding 15,000,000 Series 2 Perpetual Preferred Shares. San Miguel Food will redeem the shares on March 12, 2020 at a redemption price of P1,000 per share.
San Miguel Food may redeem in whole the outstanding Series A Bonds at 101.0 percent on the third year or at 100.5 percent on the fourth year. For the Series B Bonds, the company may redeem the bonds at 101.0 percent on the fifth year or 100.5 percent on the sixth year.
BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., Philippine Commercial Capital Inc., PNB Capital and Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. have agreed to act as joint lead underwriters and book runners of the offering.
San Miguel Food, earlier known as San Miguel Pure Foods Company Inc., was listed with the Philippine Stock Exchange on June 29, 2018 after parent San Miguel approved and implemented the internal restructuring and consolidation of its food and beverage businesses under San Miguel Food.
San Miguel Brewery Inc. and Ginebra San Miguel Inc. were consolidated with the food division under San Miguel Food, thereby establishing a unique unit within the San Miguel Group focused on the food and beverage businesses.
San Miguel Food’s net income in the first nine months of 2019 was flat at P22.9 billion as higher sales across all segments of the group were offset by increased costs of raw materials and operating expenses following expansion initiatives.
Net income of the beer and non-alcoholic beverages segment increased 12 percent to P19.84 billion from P17.76 billion in 2018, while profit of the spirits segment jumped 68 percent to P1.32 billion from P789 million in 2018.
Net income of the food segment, however, fell 60 percent to P1.75 billion from P4.37 billion in 2018.