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San Miguel Brewery all set for delisting

San Miguel Brewery Inc. (SMB), the country’s biggest beer producer, is all set to delist after the securities regulator denied all requests to extend the end-2012 deadline to meet the minimum 10-percent public-ownership requirement of the local bourse, an official of its controlling shareholder said last week.

San Miguel Corp. (SMC) President Ramon S. Ang, in a text message last week and speaking for the first time on the issue after the request for an extension by SMB and several other firms was denied by the Securities and Exchange Commission last month, confirmed that SMB will likely be delisted.

At present, Ang said, there are no discussions with Japan’s Kirin Holdings Co. Ltd., SMB’s second major shareholder, to address the public float deficiency. He did not elaborate.

The minimum rule set by the Philippine Stock Exchange (PSE) was a key component of the bourse’s efforts to raise liquidity in local stocks to attract more investors. It was also meant to appease the Bureau of Internal Revenue, which implements at the start of 2013 higher tax charges on the trading of non-compliant firms.

Based on the PSE’s latest count, there were still 10 non-compliant firms at the end of 2012, meaning that these firms will be immediately suspended starting this year and will be delisted by July if the public-float requirement remains unaddressed.

And while most firms opted to comply or voluntarily go private (there were 45 non-compliant companies at the start of 2012), some of the larger-cap ones such as SMB and PAL Holdings, an airline operator jointly owned by the San Miguel Group and taipan Lucio Tan, are yet to meet the requirement. A third SMC unit, San Miguel Properties, is also non-compliant.

PSE President Hans Sicat earlier said he was satisfied with the level of compliance and described the program a “success” even as he noted that each firm faced a different set of problems when meeting the minimum float rule.

In the case of SMB, compliance was expected to be difficult because neither of its two major shareholders wanted to dilute its holdings. SMC owns 51 percent of SMB, while Kirin Holdings owns a little over 48 percent, placing just 0.6 percent in the hands of the public.

SMB went public five years ago and its initial public offering was among SMC’s earliest moves as part of an aggressive diversification strategy that saw it expand from food and drinks to higher-margin sectors. SMC today has interests in power generation and distribution, toll roads, oil refining, air infrastructure and mining.

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