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San Miguel Corporation
...SMC's Bulacan airport project update

SMC’s Bulacan airport proposal up for ICC review

SAN MIGUEL Corp.’s (SMC) unsolicited proposal for a P700-billion airport in Bulacan province will be up for review on Jan. 11 by the National Economic and Development Authority’s (NEDA) Investment Coordination Committee (ICC).  

NEDA Undersecretary Rolando G. Tungpalan said that the airport will be among priority projects that the agency will be reviewing in the committee’s first meeting this year.

“The San Miguel Airport was discussed in the ICC-Technical Board; we asked DoTr (Department of Transportation) to submit additional information to enable us to validate some of the assumptions the DoTr submitted,” Mr. Tungpalan told reporters last week.

“We have a Jan. 11 ICC-Technical Board before that we would be able to ascertain whether it is ready, whether there is new information that would lead us to sharpen our analysis,” he added.

The airport project’s revenue model will be among the items to be evaluated.

“Certain assumptions need to be amplified, like vital to a decision point. Like revenue sources, for the project as a whole… unsolicited projects assume a certain rate of return. That will be the focus for a Swiss challenge,” Mr. Tungpalan said.

After passing the Technical Board, the proposal will go up the ICC-Cabinet Committee for further deliberation before going through the NEDA Board for the President’s approval.

After approval, the project will then undergo a Swiss challenge, under which competing bids are solicited from other parties who might top the original proposal. The original proponent is then entitled to match competing bids.

SMC has been granted original-proponent status, according to DoTr Secretary Arthur P. Tugade.

The proposed airport in Bulacan involves a 2,500-hectare property with up to six runways, to be configured for about 100 million passengers a year.

Mr. Tungpalan said that if construction started in 2017, the project would have been completed “before the term of the President ends.”

It is one of at least two unsolicited proposals for a new airport outside Metro Manila but within surrounding provinces, as the government looks into establishing another gateway to decongest the Ninoy Aquino International Airport (NAIA).

The other proposal is by All-Asia Resources & Reclamation Corp., the Tieng family’s team-up with Belle Corp., for a $50-billion airport and economic zone at Sangley Point in Cavite — which has yet to complete feasibility studies for ICC to review.

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...San Miguel pala nakakuha ng C-6? Smile


Meanwhile, the government and concessionaire San Miguel Corp. (SMC) broke ground yesterday on Phase 1 of the SEMME or the C-6 Expressway Project.

The project is a 34.024-kilometer, six-lane, combined elevated and at-grade expressway with two directional traffic flow. It will start in the south with a connection to the existing Skyway Stage 1 in FTI, Taguig City, and will terminate in Batasan Complex in Quezon City. It eventually be linked to the North Luzon Expressway. Once completed, travel time from Bicutan, Taguig to Batasan, Quezon City will be reduced to 35 minutes.

Construction of the SEMME is targeted to start in April 2018, with Phase 1 targeted to be completed in 2020.

The project will be undertaken by SMC unit Citra Intercity Tollways, Inc.

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SMC food unit to conduct follow-on offering by Q2

SAN MIGUEL Food and Beverage, Inc. (SMFBI) looks to conduct a follow-on offering by the second quarter of 2018 in order to meet the minimum public float of 15%.

Diversified conglomerate San Miguel Corp. (SMC) is currently consolidating its food and beverage businesses Ginebra San Miguel, Inc. (GSMI) and San Miguel Brewery, Inc. (SMB) under San Miguel Pure Foods Company, Inc. (SMPF), which is being renamed SMFBI.

After the consolidation, SMFBI will have a public float of 4.3%, way below the current floor of 15% for listed companies.

“The company is targeting 15% which is the minimum requirement. And then we will decide later on if there is an additional follow-on (offering) that is needed,” SMPF President Francisco S. Alejo III said during a special shareholders’ meeting in Mandaluyong City on Thursday.

SMC Chief Finance Officer Ferdinand K. Constantino said they look to attract a combination of foreign, institutional, and domestic investors for the issuance.

Mr. Constantino noted the surviving company can book up to P245 billion in revenues this year,  with P120 billion coming from food, P100 billion from beer, and the remaining P25 billion from GSMI.

On the other hand, SMPF secured shareholder approval for various transactions relating to the consolidation of SMC’s businesses during the special stockholders’ meeting. Among these are the changes in SMPF’s corporate name to SMFBI and the change in its primary purpose to include the operations of the liquor and brewery businesses.

Shareholders also approved SMPF’s acquisition of SMB and GSMI from SMC through a share swap transaction, valued at P336.35 billion for a total of 7.86 billion common shares in SMB and 216.97 million common shares in GSMI.

“The company will issue 4,242,549,130 common shares to SMC valued at P79.28 per share, totaling P336, 349,294,992.60,” SMPF said in a presentation.

The shares resulting from the share swap transaction will also be listed at the PSE.

The company has also been given the go-signal to conduct a tender offer for SMB and GSMI shares held by its minority shareholders. This move, however, will only be done if the Securities and Exchange Commission requires the company to do so.

Mr. Constantino said the consolidation of SMC’s traditional businesses will provide value proposition to investors, as it can be used as a gauge for the country’s food and beverage sector.

“It will be attractive to investors, because there is no other food and beverage company in the Philippines. It will be a good proxy for the Philippine environment… Malaki value nun (The value is significant), because there’s a big demand for that,” Mr. Constantino told reporters in a briefing after the special shareholders’ meeting.

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