MANILA, Philippines – Diversified conglomerate San Miguel Corp. (SMC) has secured a $1-billion loan from five banks to pay off its existing debts.
Another $200 million will be tapped to maximize available funding under a $1.3-billion, five-year loan agreement, SMC said in a disclosure yesterday.
“The company availed of a $1.3-billion facility loan agreement, which includes a greenshoe option,” SMC said.
“To date, of the total amount available under the facility, the company has drawn $1 billion to pay in full and refinance its existing $1-billion loan,” it added.
SMC earlier tapped Australia and New Zealand Banking Group Ltd., DBS Bank Ltd., Deutsche Bank AG, Bank of America Merrill Lynch and Standard Chartered Bank for a loan agreement.
“The company intends to avail of an additional $200 million through the exercise of the greenshoe option under the facility,” SMC said.
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The diversified conglomerate has been paring its debts through new loans that offer better terms.
In April, SMC generated $800 million from the largest issuance of a dollar-denominated bond by a Philippine company. It forms part of a $2-billion medium-term notes program of SMC.
The holding firm is undergoing a five-year, $34.83-billion investment program that will make it the largest investor in the Philippines. The conglomerate said it will spend an average of P283.52 billion every year until 2017.
From its core brewery and food business, SMC has expanded into power production (SMC Global Power Corp.), downstream oil sector (Petron Corp.), packaging (San Miguel Yamamura Packaging Corp.), airline (Philippine Airlines) and several infrastructure projects like the Caticlan airport, Skyway and the NAIA Expressway.
SMC’s net income sank by half to P4.2 billion in the first quarter from P8.5 billion a year ago, trimmed by lower equity earnings, higher interest expense and a decline in foreign exchange, with net income before controlling interest slumping 34 percent to P7.59 billion.