SM Prime to offer 110-B bonds to fund 180-B capex
SM Prime Holdings, Inc., one of the leading integrated property companies in Southeast Asia, is planning to raise R10 billion from the issuance of long-term, fixed-rate bonds to help fund its R80-billion capital expenditure budget for the year.
In an interview after the firm’s annual stockholders’ meeting yesterday, SM Prime Chief Finance Officer John Nai Peng C. Ong said “we still have a little left from the R60-billion shelf registration that is about to expire this year so we have to use it.”
Ong said the capex will be financed mainly by internally generated funds (60 percent) while the balance will be funded by the bond offering as well as bank loans. SM Prime has earmarked R80 billion this year to support the growth of its key businesses
in the country, up from the R58 billion it spent last year, said Ong.
The capital expenditure will be allocated to reach key provincial cities which demonstrated promising economic progress and for the expansion of the Company’s other businesses.
“The Philippines is projected to register one of the fastest economic growth in South East Asia and this will definitely benefit key cities all over the country,” SM Prime President Jeffrey C. Lim said.
He added that, “we want to take advantage of the fast growing provincial areas in the Philippines with increasing urbanization and commercialization stemming not only from robust domestic demand but also from increasing investments in the country.”
SM Prime has already opened SM Center Imus in Cavite last February, and is scheduled to open SM City Urdaneta Central in Pangasinan and SM City Telabastagan in Pampanga in the first half of 2018.
Ong said they intend to open five to six malls this year, in addition to the expansion of some malls, with the aim of increasing its total gross floor area by five percent.
SM Prime, through SM Development Corporation (SMDC), targets to launch at least 15,000 residential units this year. The Company will continue to develop high-rise building projects as these attract great number of urban dwellers and startup families.
The Company will also expand its mid-rise building and single-detached house and lot projects to address a larger share of the broad housing demand across all segments.
SM Prime will also open this year its third office building in the Mall of Asia Complex, the ThreeE-Com Center, as well as expand the Park Inn Hotel in Clark, Pampanga.
During its Annual Stockholders’ Meeting, SM Prime declared a regular cash dividend of R0.30 and special cash dividend of R0.05 per share amounting to approximately R10 billion to all stockholders of record as of May 9, 2018 and payable on May 23, 2018.
This is equivalent to a 39 percent payout of last year’s net income.