SMC to grow infrastructure business to $20B by 2020

San Miguel Corporation expects its infrastructure business to be worth $20 billion by 2020, eclipsing the combined value of its already huge investments in the power and oil sectors.

“At the end of year 2020, I think our infra group valuation wise will be bigger than power and oil combined because the valuation of those kind of business is usually between 15 to 20 times of the cashflow so we should have a market capitalization of $20 billion on our infrastructure business,” said SMC president Ramon S. Ang.

He noted that SMC’s existing tollways are already generating strong cash flows and “we hope to finish building our connector road connecting Balintawak to Buendia. SMC is also nearing completion of its NAIA Expressway.

“If you notice our infrastructure business, our Skyway is hitting about 300,000 cars a day now this 2016. Our South Luzon Expressway is also 300,000 plus cars a day. Our Tarlac Pangasinan Luzon Expressway originally projected to hit 15,000 a day is now hitting 18,00 to 19,000 cars a day already,” said Ang.

However, Ang said focus will not just be on expanding its infrastructure business. “We hope to help our consumers by building more plants, maybe in Visayas or in Luzon,” he said.

Pointing out that it was able to bring down electricity costs on Mindanao with the opening of a new plant, Ang said more SMC owned plants in Visayas and Luzon should have the same effect.

“Hopefully to influence everybody to bring down the prices of electricity. To make it more affordable to the manufacturing sector and industry and help our industry to be more competitive,” he said.

Meanwhile, SMC has set the public offering date for its 30 billion worth of preferred shares for March 7 to 11, 2016 with institutional investors given until March 3 to submit commit letters. Issue and listing date has been set on March 21.

SMC is planning to offer 280 million preferred shares at 75 per share with an over allotment option of 120 million shares.