Cornerstone investors look to enter SMC’s food and beverage company

SAN Miguel Food and Beverage Inc., formed from three companies combined by the conglomerate, is looking at a number of cornerstone investors to come into the firm as part of its share sale and also to comply to the government’s minimum public float.

Ramon S. Ang, San Miguel Corp. (SMC), president and COO, said the company may do between a 20-percent and 30-percent sale of its stake in the food and beverage company, possibly to foreign or local investors.

“We will comply with a minimum public float. We think we might have to do 20 percent to 30 percent. There is demand for the company’s shares. At present, there are already a number of groups offering to be a cornerstone investor,” Ang said.

After it completes the approval process for its consolidation when companies such as beer maker San Miguel Brewery Inc., distiller Ginebra San Miguel Inc. and food unit San Miguel Pure Foods Co. are folded into one company using Pure Foods as a vehicle.

Ang pegged the stake to value around $3 billion. The consolidation of the three food and beverage-related units, through a P336.35-billion share swap with San Miguel, the new public float of 4 percent.

Shares of the company will be suspended for trading if it dropped to the minimum public float of 15 percent required by the government and 20 percent for the new public company.

“The timing depends on government approval,” Ang said, referring to the entry of the cornerstone investors.

San Miguel Food shareholders last Friday approved a proposal to leave the process of facilitating the share sale to the company’s management.

As part of the consolidation plan, San Miguel’s stakes in Ginebra and San Miguel Brewery will be folded into Pure Foods in exchange for 4.24 billion new shares worth P336.35 billion.

Pure Foods will then reduce its shares’ par value to P1, from P10 apiece, while increasing its authorized capital stock to P12 billion, divided into 11.6 billion common shares with a par value of P1 million and P40-million preferred shares with a par value of P10, from the current P2.46 billion divided into 2.06 billion common shares and P40-million preferred shares with a par value of P10. San Miguel is deemed subscribed to 44 percent of the newly created shares as part of the share swap, that bars existing Pure Foods shareholders from exercising their preemptive rights.

The Securities and Exchange Commission has yet to act on the application by San Miguel on the share swap.

Upon completion of the consolidation, Ang will then assume as president of the consolidated company, while the current head of each unit will be responsible for the operation of each unit. “We will help each other,” Ang said.

The company expects profit for the year to hit P33 billion as it remains optimistic of its prospects.

Turning Points 2018
Suntrust banner2