SMC Global Power repurchasing $300-M securities

The power generation unit of diversified conglomerate San Miguel Corp. (SMC) has decided to buy back $300 million worth of securities.

In a disclosure, SMC Global Power Holdings Corp. said its board approved the tender offer to the holders of $300 million, 7.5 percent undated subordinated capital securities issued in May 2014.

SMC Global Power has yet to set the terms and conditions “as may be determined by management to be advantageous to the corporation.”

The securities were issued to finance its expansion program through the construction of a coal-fired power plant in Malita, Davao.

The Malita power plant will help balance the power supply differential between northern and southern Mindanao and provide reliable and continuous supply of electricity at a lower cost.

The plant was targeted to help address the power crisis in the island, which used to face power shortages of up to 10 hours, depending on the area.

In August, SMC Global Power raised P15 billion after completing the last tranche of its fixed rate bond offering.

The P15 billion Series G fixed rate bonds due 2023 were listed on the Philippine Dealing and Exchange (PDEx).

SMC Global Power is one of the country’s leading and largest power companies, with a combined capacity of 4,153 MW or about 19 percent of the power supply of the national grid, 25 percent of the Luzon grid, and nine percent of the Mindanao grid.

Meanwhile, the Bureau of Internal Revenue confirmed the tax free transfer by San Miguel Corp. of its 7.86 billion shares in San Miguel Brewery and 216.97 million shares in Ginebra San Miguel Inc. to San Miguel Food and Beverage in exchange for the 4.1 billion common shares of SMFB.

The transfer was part of the SMC Group’s efforts to consolidate its food and beverage businesses under one subsidiary.

SMFB amended the company’s primary purpose to include engagement in the alcoholic and non-alcoholic beverage business.

SMC has diversified through the years from just a beer business. It has diversified into infrastructure, power, packaging and oil refinery among others.