San Miguel Corporation

...bagong proyekto na naman

SMC proposes to build Caticlan-Boracay bridge

DIVERSIFIED conglomerate San Miguel Corp. (SMC) will be submitting today an unsolicited proposal to the government for a P3-billion bridge connecting Caticlan to Boracay island.

“We are going to submit the proposal for the unsolicited offer to build the bridge of Caticlan-Boracay tomorrow,” SMC President and Chief Operating Officer Ramon S. Ang told reporters in a briefing after the annual shareholders’ meeting of Top Frontier Investment Holdings, Inc. in Mandaluyong yesterday. Top Frontier holds 66.09% of SMC.

Mr. Ang said the bridge will connect the two islands which have an actual gap of 1.1 kilometers. He said the project can be completed within two years after securing approval from the government.

The proposed bridge will also include a pipe that can handle the sewage and waste from Boracay.

“It can handle the sewage pipe and lahat ng sewage from Boracay to Caticlan, and then from Caticlan we can bring in fresh water to Boracay para ’di na kailangan mag-deep well. And also it can bring out all the solid waste,” Mr. Ang said, noting that the amount of waste generated in Boracay stood at 170 tons a day before the island’s six-month closure last April.

To regain its P3-billion investment, Mr. Ang said a fee will be imposed on vehicles and pedestrians who will use the bridge, as well as the waste, sewage, fresh water, and power lines that will be passing through it.

Mr. Ang noted that the investment recovery period will take around 10 to 15 years.

Asked why the company is proposing to build the project, Mr. Ang said this will help recover its investments in the Caticlan airport in Boracay.

The company is currently expanding Caticlan airport’s apron areas, or the parking spaces of aircrafts.

“Kailangan naming i-expand ’yung apron to be able to handle 28 aircrafts. And then kulang na lang ngayon ’yung passenger terminals (We need to expand the apron to handle 28 aircraft. What is needed now are the passenger terminals),” Mr. Ang said.

The airport expansion will cost SMC around P15 billion, according to Mr. Ang. The project is expected to be completed by the end of 2019.

For its traditional businesses, SMC plans to increase production of its liquor unit, Ginebra San Miguel, Inc. (GSMI) with the construction of four new manufacturing plants.

Mr. Ang said the company is choosing from eight potential locations for the plants. It will take two years to build the four manufacturing plants.

The company will also be completing a brewery in Sta. Rosa, Laguna with a capacity of two million hectoliters per year. In addition to this, SMC will be adding seven more breweries in Pangasinan, Quezon, Cebu, Bacolod, Cagayan de Oro, Bicol, and Iloilo.

SMC’s unit, San Miguel Food and Beverage, Inc. (FB), recently gained approval from the Philippine Stock Exchange to execute a share swap that would formally place San Miguel Pure Foods, Inc., GSMI, and San Miguel Brewery, Inc. under one entity.

Trading of FB shares are currently suspended, until such time that the newly formed unit meets the minimum public ownership (MPO) rule of 15%. FB’s public float is currently at around 4%.

Mr. Ang said the share sale, which would allow it to comply with the MPO rule, is targeted within the year. It may however opt to ask for an extension should it fail to get the necessary regulatory approvals or be prevented from selling the shares due to market volatility.

SMC’s recurring profit grew by 31% to P19.4 billion during the first quarter of 2018, supported by a 19% increase in consolidated revenues to P234.3 billion.

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SMC to ‘invest heavily’ in renewable energy

DIVERSIFIED conglomerate San Miguel Corp. (SMC) plans to build up to 10,000 megawatts (MW) of renewable energy facilities in the next 10 years, adding to its existing installed capacity coming mostly from traditional coal and gas power plants.

“San Miguel is going to invest heavily on renewable energy,” Ramon S. Ang, SMC president and chief operating officer, told reporters.

Among renewable energy resources, he identified hydropower, wind, ocean tide and battery storage as the company’s possible investment ventures. He declined to disclose details on which of these will corner the biggest share, saying competitors might beat him in the projects.

“We predict to invest up to 10,000 megawatts in the next 10 years,” Mr. Ang said.

He said the required investment in renewable energy would be substantial as these remain costlier to build than a coal-fired power plant, except for solar energy. He brushed off solar energy, saying its availability is limited as experienced by other countries that had to resort to other sources to maintain the delivery of the required power capacity.

“The idea is to put up as many as possible,” Mr. Ang said, adding that each of the target projects has a good potential even the small ones.

“Sana (Hopefully), each hydro can produce 1,000 MW,” he said.

Mr. Ang said initial studies have shown good “wind profile” in an area in Luzon, which the company is considering to build a wind farm. He said a wide area within the country’s main island remains viable for a wind energy project.

“We have a report already — a very good wind profile, a very big capacity can be installed. And the land for that project is already owned by San Miguel,” he said.

SMC, through its energy subsidiaries, has an installed capacity of around 4,000 MW after the addition of the 630-MW Masinloc coal-fired power plant, which it bought for $1.9 billion in December last year from the equity holders of the plant’s owner Masin-AES Pte. Ltd.

In the same media briefing, Mr. Ang gave an update on the case between SMC unit Petron Corp. and state-led National Oil Co. (PNOC).

In October last year, Petron Corp. filed a case against PNOC for breach of a binding and compulsory sale-leaseback contract, which the listed company said threatens to hurt its operations, its shareholders and the Philippine economy.

Petron had asked the Mandaluyong Regional Trial Court for the issuance of a temporary restraining order to “stop PNOC from performing acts aimed at ousting Petron of its leased properties.” The company sought the court’s help over PNOC’s “threats, breach of sale and leaseback agreement.”

Petron said it had offered to negotiate the agreement with PNOC as early as 2016, but it had been constrained to seek judicial intervention after the government company said earlier last year that it would terminate the lease.

Mr. Ang said depending on the outcome of the case, he might elevate the legal dispute for international arbitration.

The case stemmed from a notice from PNOC directing Petron to abandon and clean up the contested sites on or before expiration of the lease, which is in August this year. Petron said PNOC had offered the properties covered by the leases to interested new independent oil companies, “in total disregard of the rights of Petron.”

Petron has existing lease agreements with PNOC for the sites of its $3-billion refinery in Bataan, 24 bulk plants and 67 gasoline stations. The company supplies more than a third of the country’s petroleum requirements.

Mr. Ang said Petron’s leased properties are originally owned by it and acquired over several years to be used for its refinery, distribution and sales operations. Petron, however, was compelled to give up its land to PNOC in 1993 to comply with the requirements of its privatization.

“To secure foreign and local investments in Petron and ensure stability of its operations, the transfer of the properties was enabled through a deed of conveyance and lease agreements that guaranteed its long-term and continuous use by Petron,” the company previously said. 

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8-10! positive! Smile

San Miguel says recurring profit jumps 29% in 1st half

DIVERSIFIED conglomerate San Miguel Corp. (SMC) grew its recurring profit by 29% in the first six months of 2018, following higher volumes and favorable selling prices across its units.

In a statement issued Thursday, SMC reported a recurring net income of P35.5 billion as of end-June, supported by a 27% jump in consolidated revenues to P499 billion.

The listed company said that including the impacts of mark-to-market losses due to foreign exchange translation, net income would have stood at P27.6 billion, 6% higher year-on-year.

“Increased business focus and a lot of hard work were key to our group’s stellar performance. We’re encouraged by the results we’ve had so far, and are very hopeful that this momentum will carry through for the rest of the year,” SMC President and Chief Operating Officer Ramon S. Ang was quoted as saying in a statement.

SMC’s core interests are in food and beverage, power, fuel and oil, and infrastructure.

The newly consolidated food and beverage arm under San Miguel Food and Beverage, Inc. (SMFB) delivered a 20% increase in net income to P15.4 billion. This followed a 15% uptick in combined sales revenues to P137.4 billion.

The food business alone generated a profit of P3.1 billion, as consolidated revenues went up 12.4% to P62.9 billion due to the strength of its agro-industrial and branded value-added businesses.

The beer unit through San Miguel Brewery, Inc. expanded its revenues by 18% to P62.5 billion. Its net income accordingly grew by 26% to P11.3 billion for the first semester.

Ginebra San Miguel, Inc. posted a net income of P506 million, after revenues went up 19% to P12 billion due to the growth of its Ginebra San Miguel and Vino Kulafu brands.

Petron Corp. exhibited profit growth of 16% to P9.5 billion from January to June, fueled by the sales volumes from both Philippine and Malaysian operations. The company also benefited from the rising prices of crude oil and finished products.

Petron’s consolidated revenues reached P273.5 billion, 32% higher than the P207 billion it logged in the same period a year ago.

Meanwhile, SMC Global Power Holdings Corp. saw its consolidated revenues climb by 41% to 57.4 billion, as it recognized additional contributions from Masinloc, Limay, and Malita, alongside higher average realization prices for Sual’s bilateral and spot sales, and higher spot sales from Ilijan.

The power unit’s operating income stood at P17 billion for the first half, 28% higher than the P13.3 billion it posted in the same period a year ago.

For the packaging business, the San Miguel Yamamura Packaging Group expanded its operating income by 17% to P1.6 billion in the first semester. Sales revenues went up by a fourth to P17.6 billion following strong sales from the glass, plastics, and metal products. The company also noted the positive performance of its Australian operations.

The infrastructure business also recorded an 11% increase in consolidated revenues to P12.1 billion, as the company saw higher traffic volume from its operating toll roads. These include the South Luzon Expressway, Skyway Stage 1 and 2, and the Ninoy Aquino International Airport Expressway. Its operating income likewise gained 19% to P6.2 billion.

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San Miguel may get go signal for TPLEx extension by next month

THE DEPARTMENT of Public Works and Highways (DPWH) said it is looking to give San Miguel Corp. (SMC) by next month the original proponent status (OPS) for its proposal to extend the Tarlac-Pangasinan-La Union Expressway (TPLEx).

“Sa TPLEx malapit na kami magbigay ng OPS…. Maximum siguro is next month [We’re giving the OPS to TPLEx soon…. Maybe the maximum is next month],” DPWH Public-Private Partnership (PPP) Director Alex G. Bote told reporters on Thursday.

In February, SMC submitted to the government a P23.948-billion unsolicited proposal to build a 59.4-kilometer toll road extending the TPLEx from Rosario, La Union to San Juan, La Union.

The extension has three sections, namely Rosario to Tubao, Tubao to Naguilian, then Naguilian to San Juan.

DPWH Build, Build, Build Committee Chairperson Anna Mae Y. Lamentillo told reporters on Friday that while the proposal for the extension is still under review, they are positive the third phase of the original alignment of TPLEx will be completed by 2019.

“We’re confident that we would be able to finish or to open the entire alignment by next year,” she said.

The original alignment of the 89.31-kilometer TPLEx is divided into three segments: the stretch from Tarlac City to Rosales, Pangasinan; then from there to Urdaneta City, Pangasinan; then from there to Rosario, La Union.

Right of way acquisition and construction of a portion of the third section is on-going. The third section, which stretches from Pozorrubio in Pangasinan to Rosario in La Union, is scheduled to open in June 2019.

SMC is also the government’s private concessionaire for the TPLEx project. 

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...biggest international airport pag nakuha nila to construct ito...gawin na kasi

Biz group backs SMC’s Bulacan airport plan

THE INTERNATIONAL Chamber of Commerce-Philippines (ICCP) expressed its support for San Miguel Corp.’s (SMC) proposed Bulacan International Airport — also called the New Manila International Airport — after the fiasco at the Ninoy Aquino International Airport (NAIA) over the weekend.

In a statement on Wednesday, ICCP Chairman Francis C. Chua said the closure of NAIA’s main runway caused by the crash landing of an Xiamen Airlines jet proved the “inherent problems of the NAIA, and why it’s no longer sustainable as our country’s main gateway.”

“With just two intersecting runways and virtually no space for additional runways, it cannot serve the needs of our growing economy and population, much less be a catalyst for economic growth,” Mr. Chua said, referring to NAIA.

“Government should now put all its efforts to pave the way for, a new international gateway outside of Metro Manila, which will serve as a long-term, future-proof solution to airport congestion problems that have held our country back for so long,” he added.

Mr. Chua said the ICCP believes SMC’s New Manila International Airport proposal is the “best” for the Philippines.

“At no cost to the government, and with no subsidies or guarantees required, San Miguel will build a futuristic ‘aerotropolis’ with up to four parallel runways — which can be expanded further to six. With capacity for 60 aircraft movements per runway per hour, this will eliminate all congestion issues and significantly raise our attractiveness as tourism and investment destination in the region,” he added.

The ICCP is the Philippine chapter of a Paris-based organization of companies from more than 130 countries all over the world.

SMC’s P735-billion airport proposal has already been conditionally approved in April by the National Economic and Development Authority (NEDA) Board chaired by President Rodrigo R. Duterte.

Questions were raised on the project’s financial and technical viability, hence the need for another round of approval from the NEDA. But SMC said it is capable of implementing the project without a financing partner.

The NEDA said in June the concession terms for the project is already being prepared, after which it will again be reviewed by the Board and an inter-agency committee.

Once the project is given the final go-signal from NEDA, it will then be subjected to a Swiss challenge, where other parties are allowed to submit counterproposals that SMC may match.

SMC’s proposal covers the construction, operation, and maintenance of a 2,500-hectare airport and an 8.4-kilometer airport toll road in Bulacan. The diversified conglomerate said the airport could handle 100 million passengers a year, far more than NAIA’s capacity of 30.5 million passengers a year. 

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...tingin ko aprubado ito, pati yung sa Sangley Smile

SMC says Bulacan airport project to generate one million jobs

SAN MIGUEL Corporation (SMC) on Monday said its proposed P736-billion New Manila International Airport in Bulacan will generate as much as one million jobs in its construction phase.

In a statement on Monday, SMC President and Chief Operating Officer Ramon S. Ang said the company will hire “the best workers from here and abroad,” once it secures the go-signal for the airport construction.

“It’s a massive undertaking. We will need Filipino talents in engineering, construction, hospitality, and airport-related services. Hopefully, this will give many of our OFWs countrymen a reason to come home, be with their families, and at the same time help in building a better future for our nation,” Mr. Ang was quoted as saying.

SMC is proposing to build an airport that will be built on a 2,500-hectare property with up to six runways and modern terminals, and to be configured to handle about 100 million passengers a year.

The project was approved by the NEDA Board — chaired by President Rodrigo R. Duterte — in April, subject to the condition of another approval round for the concession agreement to address concerns about the proponent’s financial and technical capability to deliver.

SMC has already submitted the revised concession agreement along with the risk allocation matrix. The Department of Finance and NEDA (National Economic and Development Authority) forwarded their comments earlier this month. SMC is now considering the comments.

The Department of Transportation (DoTr) will then start negotiations with SMC to finalize the draft concession agreement which will be submitted to the NEDA-Investment Coordination Council, and will jump-start the Swiss Challenge.

Under a Swiss challenge, third parties can submit competing offers but the original proponent will be given the right to match these offers.

Last week, the DoTr said two airport projects are now being prioritized — the construction of an airport in Bulacan and the development of an airport in Sangley, Cavite — to ease congestion at the Ninoy Aquino International Airport. 

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...Ang really pushing for it Tongue

SMC plans MRT Loop to link Bulacan airport

MANILA, Philippines — Food-to-infrastructure conglomerate San Miguel Corp. (SMC) plans to build an MRT Loop with an airport express – similar to Hong Kong’s much-touted MTR – that would seamlessly connect Metro Manila to its planned aerotropolis in Bulacan.

The planned elevated train system will span some 200 kilometers and will connect SMC’s proposed New Manila International Airport (NMIA) in Bulakan, Bulacan to EDSA and various points in between, SMC president and COO Ramon Ang told reporters in an interview in his office.

While the stations are still being finalized, the MRT Loop is envisioned to include a non-stop high-speed train that would allow fast connection between EDSA and the Bulacan Airport.

“In 20 minutes, you will be at the airport,” Ang said.

He said this would be something like Hong Kong’s famous MTR which connects the airport and the city, and gives passengers the option for faster travel through the airport express line.

SMC is still finalizing the cost of the MRT Loop, but Ang said this would already be part of the total cost of the massive airport project estimated at $15 billion.

Aside from the mass transport system, SMC will also construct a $1 billion spillway for excess water from Angat and Ipo Dams to drain directly to the Manila Bay.

This, he said, would solve the perennial flooding problem in Bulacan.

“We need to finish the spillway in five to six years. Otherwise, it will destroy what we are building,” Ang said.

All these new infrastructure projects namely the MRT Loop, the Airport Express and the spillway are all intended to enhance the viability of SMC’s proposed Bulacan Airport and are targeted to be ready in five to six years.

“What we have is a complete masterplan,” Ang said.

He said the company could start operations of its proposed Bulacan Airport as early as six years upon approval of the $15-billion project, making it the fastest and most viable solution to the worsening problem at the Ninoy Aquino International Airport (NAIA).

SMC’s strong balance sheet, he said, also shows that it has the financial muscle to fund the project on its own.

“Funding is not a problem. We have a strong balance sheet,” Ang said.

Ang trumpeted the proposal, saying that NMIA “will be the most modern airport in the country and would be a real game changer.”

Based on its blueprint, NMIA has the capability to have a total of four runways, with the first two already operational on the fifth year upon approval of the project, according to company documents. The last two runways will be operational by 2024.

To be developed on a 2,500-hectare property in Bulakan, Bulacan, NMIA can accommodate 100 to 200 million people, a far cry from NAIA’s capacity of 30 million passengers.

Furthermore, NMIA will be capable of handling 60 aircraft movements per hour per runway compared to NAIA’s current runway capacity of 45 movements per hour, the project’s blueprint further showed.

More importantly, SMC said its proposal cuts the construction timeline by half as it would not require sea reclamation compared to the proposal to develop a new airport off Sangley Point in Cavite.

For the funding, SMC said the project would be entail no cost to the government.

In terms of contribution to the economy, SMC estimates that NMIA can contribute as much as P395 billion to the economy by 2025 and can generate 1.8 million jobs by that time.

Last April, the National Economic and Development Authority board gave the green light for SMC’s Bulacan airport project. But the project still needs to be subjected to a Swiss challenge.

Calls for a new premier international airport in the country are mounting after NAIA was marred by flight disruptions for at least 200 flights and at least 100,000 passengers were stranded after a Xiamen Airlines carrier veered off the runway last Aug. 16

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...ituloy na kasi!

SMC taps Standard Chartered, Sumitomo as financial advisors for airport project

SAN MIGUEL Corp. (SMC) is tapping Standard Chartered Bank (SCB) and Sumitomo Mitsui Banking Corp. (SMBC) as co-financial advisors for its proposed New Manila International Airport in Bulacan.

In a statement over the weekend, the diversified conglomerate said the partnership with SCB and SMBC is a “key step forward” in pursuing the P735-billion airport project.

“They are both leading advisors in the infrastructure and airports sector and will be able to bring their expertise and experience to assist SMC throughout the process, with the ultimate goal of the successful delivery and closing of this landmark project for the Philippines,” SMC said.

The New Manila International Airport project was conditionally approved by the National Economic and Development Authority (NEDA) Board in April, with questions on its financial and technical viability.

As an unsolicited proposal, the New Manila International Airport project will have to go through a Swiss challenge, where other groups may submit counterproposals that SMC has the option to match.

SMBC said it will work with SCB to ensure “San Miguel has all the support required to get a project of this magnitude and scale, done.”

In June, the NEDA said it is preparing the concession terms for the airport project, which when completed, will be further reviewed by an inter-agency committee and the NEDA Board chaired by President Rodrigo R. Duterte.

SMC intends to construct, operate and maintain the airport, which will feature four to six parallel runways and an 8.4-kilometer airport toll road. When completed, the gateway is expected to have a capacity of 100 million passengers a year, making it an alternative to the Ninoy Aquino International Airport (NAIA) in Pasay City.

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...hindi pala kaya ni SMC eh...puro hype lang eh Tongue

DOF chief: SMC subsidiary ‘incapable’ to build P735.6B Bulacan ‘aerotropolis’

The head of the Duterte administration’s economic team on Monday expressed reservations on the proposed P735.6-billion “aerotropolis” project in Bulacan province by San Miguel Corp. (SMC).

This, as the project was seen to be not only potentially in conflict with the government’s development of another airport hub at the Clark Freeport Zone in Pampanga but also might prove to be unviable as its proponent was deemed financially “incapable” to build it.

During a joint public hearing of the Senate public services and economic affairs committees on the operations and management of the Ninoy Aquino International Airport’s (Naia), Department of Finance (DOF) Secretary Carlos G. Dominguez III responded to allegations raised during the previous hearing that the DOF was supposedly hampering or delaying other airport projects, including the SMC-led airport project in Bulakan town.

“We take this opportunity to categorically say we have not caused the delay in the Bulacan airport,” Dominguez said during the hearing led by Senator Grace Poe.

“As a matter of fact, we are even providing assistance to accelerate the approval and implementation of the project.”

“One of the helpful suggestions we made to the Department of Transportation (DOTr) was to require the execution of a joint and several liability agreement, which would make San Miguel Corp., the parent company, stand behind San Miguel Holdings Corp., the private proponent, which is financially at this point incapable of undertaking a P700-billion project,” Dominguez added.

The DOF chief noted that in 2016, San Miguel Holdings had only P60 billion in total equity, citing a DOTr report.

“Considering the usual financing mix of 70-percent debt and 30-percent equity in a public-private partnership (PPP) project, the construction of the Bulacan airport will require San Miguel Holdings to infuse around P200 billion inequity, which we are not sure is going to happen,” Dominguez said.

Also, Dominguez disclosed that the DOF during a National Economic and Development Authority-Investment Coordination Committee (Neda-ICC) meeting last January raised its concern that the Bulacan airport may affect the development of the Clark International Airport and the freeport as a whole.

At the start of the Duterte administration, it began the rehabilitation of the Clark International Airport “to partially address the Naia capacity problem,” Dominguez noted.

“All airport projects are real estate projects. The real estate value of the New Clark City is currently $14 billion and government has committed an additional P12 billion. We wanted to know how the Bulacan airport, which is just 65 kilometers away from Clark, will affect the value of the New Clark City, which is by the way, the property of the Filipino people,” Dominguez said.

Also, Dominguez wanted to know how the aerotropolis would impact on the traffic situation.

“Do we need additional lanes in the North Luzon Expressway to be constructed? Do we need to change the alignment of the proposed rail system to Clark?” he said.

In April, when the project was eventually approved by the Neda Board chaired by President Rodrigo Duterte, the DOF just “compiled the issues discussed at the Neda-ICC and Board meetings,” as it will be a conflict of interest for the DOF to comment, citing that the Build-Operate Transfer Law provided that the agency was mandated to review the draft contract upon completion of negotiations between the implementing agency and the project proponent.

In this case, DOTr is the implementing agency, while San Miguel Holdings is the proponent.

“Contrary to statements made in the last hearing, we guarantee that there were no new comments added that were not already discussed before the Neda Board approval,” Dominguez said.

At present, negotiations are ongoing between the DOTr and San Miguel Holdings for the final terms of the concession agreement, before it is subjected to Swiss challenge.

Under a Swiss challenge, other companies can bid for the project, after which the original proponent that submitted the unsolicited proposal will be allowed to match or submit a better bid before the project is awarded.
The proposed new international aerotropolis, or a metropolis revolving around an airport, would involve a massive complex to be built at a 2,500-hectare location along Manila Bay in Bulakan town.

The airport project, which had been awarded an original proponent status by the DOTr, would have an initial capacity of 100 million passengers or over three times that of the Naia, the country’s gateway to Manila.

Under the project, SMC would also build an 8.4-kilometer toll road that would link the airport to the North Luzon Expressway.

SMC had said that it plans to complete the project within six years.

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...yari si San Miguel Tongue

Regulator to look into minority shareholder’s complaint vs SMC

THE Securities and Exchange Commission (SEC) has formed a special panel to investigate a complaint filed against San Miguel Corp. (SMC) and its subsidiaries for allegedly violating the mandatory tender offer rule prior to the merger of its traditional businesses.

Josefina Multi-Ventures Corp., a minority shareholder of SMC unit Ginebra San Miguel, Inc. (GSMI), said in a petition submitted to the SEC that SMC should have conducted a tender offer to all minority owners of the company before pushing through with the share swap transaction that would merge San Miguel Pure Foods, Inc., San Miguel Brewery, Inc., and GSMI under San Miguel Food and Beverage, Inc. (SMFB).

“The commission formed a special hearing panel to resolve the issue raised by Josefina,” Armando A. Pan, Officer-in-Charge of the SEC Office of the Commission Secretary, said in a mobile message.

SMC said in a disclosure to the stock exchange on Tuesday that it has received a summons and amended petition in relation to the case.

“SMC shall file its answer to the petition conformably with the 2016 Rules of Procedure of the SEC,” the diversified conglomerate said.

Josefina Multi-Ventures, which described itself as a GSMI shareholder since 2014 and holds a total of 1.84 million shares, said SMC should have made the tender offer after acquiring around 75% of SMFB.

Citing Section 19.2 of the Securities Regulation Code, the company said a tender offer is required once a person or group of persons acting in concert acquire at least a 35% stake in a listed company.

“Clearly, the basis for the application of the mandatory tender offer rule is purely quantitative; once the threshold of 35% is reached, a tender offer is required under the law,” Josefina Multi-Ventures said in its petition.

“In this case, if the tender offer rule is not applied, GSMI minority stockholders will have no other alternative than to simply accept the share swap transaction between SMC and SMFB,” it added.

The petitioner also questioned the SEC’s ruling that the tender offer rules do not apply to the transaction since it involves a de facto merger or consolidation, wherein the change in control will only result to indirect from direct.

Josefina Multi-Ventures noted that control did not shift from direct to indirect, since SMC and SMFB are two completely different entities.

“Properly considered, the share swap transaction subject of this case only contemplates the transfer of SMC’s GSMI shares to SMFB in exchange for the latter’s shares of stock. Clearly, SMC is not merging with SMFB, and neither are these two corporations consolidating into a new single corporation,” according to the petition.

Josefina Multi-Ventures is now asking for the nullification of the share swap between SMFB and SMC. It is asking that SMFB be directed to conduct a mandatory tender offer for the benefit of the minority shareholders of GSMI.

The complaint could put a halt on SMFB’s planned P142-billion follow-on offering this year, which should bring the company’s public float to the minimum 10% from its current 4.12%.

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