The Securities and Exchange Commission approved the shelf registration of SM Prime Holdings Inc. to issue P60 billion worth of fixed-rate bonds over a period of three years to finance expansion projects.
Shelf registration refers to the filing and registration of a publicly-listed company with SEC for a security offering that will be conducted incrementally over a period of time. It allows the company to register new stock offerings without having to issue them immediately.
Documents showed that for the first tranche, SM Prime would issue up to P5 billion worth of 10-year bonds with an oversubscription of P5 billion, which if exercised would boost total proceeds to P10 billion.
The property firm expects to conduct the bond offering this month.
BDO Capital and Investments Corp., BPI Capital Corp., Chinabank Capital and First Metro Investments Corp. are the joint issue managers and joint lead underwriters for the offering.
SM Prime continues its expansion despite Hans Sy’s decision to step down as the top executive of the company starting October.
BDO Capital president Eduardo Francisco said this would not have any significant impact on the bond offering as Sy would continue to sit as director and chairman of the executive committee of SM Prime and would remain hands on and involved in decision making.
Sy will step down as president and chief executive of SM Prime on Oct. 1 and will be replaced by SM Prime executive vice president Jeffrey Lim.
Francisco said Lim had served SM Prime for decades and was trusted by the family and investors.
SM Prime’s P60-billion shelf registration is the second biggest filed with the SEC after San Miguel’s P73-billion shelf registration earlier approved by the corporate regulator.
Net proceeds will be used to fund capital expenditures and expansion of SM Prime’s commercial, office and hotel operations.
The group is building three new business process outsourcing towers in its shopping mall complexes in Clark, Pampanga; Sta. Rosa, Laguna; and Iloilo.
SM Prime is also set to start constructing three office projects at Mall of Asia complex in Pasay City and an office tower in Cebu.
SM Prime is also building hotels in Quezon City and Mall of Asia complex.
SM Prime operates four core businesses including malls, residential, commercial and hotel and convention centers.
The group had 56 malls operating in the Philippines, with a total gross floor area of 7.3 million square meters as of end-March. It also operates six malls in China located in the cities of Xiamen, Jinjiang, Chengdu, Suzhou, Chongqing and Zibo.
The company is set to open five new malls in Cavite, Bulacan, Pasig, Quezon City and Antipolo and expand SM City Calamba and SM City Naga.
The mall business unit expects to have 8.6 million square meters of gross floor area by end of 2016.
