San Miguel shares plunge after share, bond sales

MANILA -- Shares of San Miguel Corp., the country's food and beverage giant, plunged 28.4 percent when trading resumed after a three-week suspension during its $970 million sale of shares and convertible bonds.

Its shares shed 43.50 pesos ($1.01) to end at 109.50 ($2.55) from a closing a price of 153 pesos ($3.57) on April 12, the day before trading was halted.

The conglomerate suspended trading of its shares for three weeks to avoid price speculation. It then announced a price of 110 pesos ($2.56) for its share sale, way below the maximum 250 pesos ($5.82) earlier quoted by company officials.

San Miguel President Ramon Ang has said the main reason for the share and bond sales was to increase the company's public float to least 10 percent as required by the Philippine Stock Exchange.

Proceeds from the sale will also be used for San Miguel's further investments in infrastructure projects. The company has recently invested in heavy industries, toll road operations, oil refining, mining and power generation.

The fund raising was divided into $370 million of shares and a $600 million of exchangeable bonds which carry a 2 percent coupon. The shares offered were listed on the local bourse while the bonds, exclusively sold to overseas investors, were listed with the Singapore stock market.

"The company's aggressive entry in heavy industries earned them a few doubts from the market," said Maria Arlysa E. Narciso, an analyst from AB Capital Securities, Inc. San Miguel has been known for its core businesses — food, beverage and packaging, she said.

Goldman Sachs, one of the bookrunners for the share and bond sales, said San Miguel's exchangeable bond issue generated over $2.8 billion in demand from over 150 investors and was almost five times oversubscribed. (AP)