Iñigo Zobel emerges as largest San Miguel shareholder, over twice bigger than Ramon Ang
Ayala heir Iñigo Zobel has emerged as the largest individual shareholder of the San Miguel Corp. after the country’s largest conglomerate declared a property dividend and gave up its 49 percent cross-ownership stake in San Miguel’s controlling shareholder, Top Frontier Investment Holdings Inc.
Because of the dividend, Zobel, Top Frontier chairman and San Miguel director, has seen his ownership stake in Top Frontier balloon to 60 percent from only 40 percent, according to Top Frontier’s prospectus.
Top Frontier will be listed this morning at the Philippine Stock Exchange at P178 a share, valuing the holding company at P87 billion, mainly through its 66 percent ownership of the San Miguel group of companies.
With his enlarged stake in Top Frontier, this means Zobel, 56, indirectly controls nearly 943 million San Miguel shares, over twice more than his partner, San Miguel president Ramon S. Ang.
RSA, according to San Miguel’s end-2013 ownership report, controls about 15.5 percent of San Miguel through Privado Holdings.
The San Miguel list varies with Top Frontier’s own account that Privado controls only a little over 11 percent of San Miguel.
Privado Holdings, a local investment holding company with P62.5 million paid-up capital, is in turn 62.5 percent by RSA and 37.5 percent by San Miguel director Thomas A. Tan.
In addition to Privado, RSA’s funding company Master Year Limited owns another 15 percent of Top Frontier.
This means that the San Miguel president, who is turning 60 tomorrow, controls at the minimum 26 percent of Top Frontier’s 66.1 percent ownership of the San Miguel pie.
Stated another way, RSA has at his disposal about 408.5 million out of the 2.376 billion outstanding common shares of San Miguel, a bloc worth about P24.5 billion at Friday’s closing price.
The former car mechanic, meanwhile, not only has been the chief architect of the bold diversification of San Miguel into power, infrastructure and airline, but he has emerged as a crucial bankroller for Top Frontier’s investments.
Master Year, a limited liability exempted company incorporated in the Cayman Islands with a share capital of $50,000 and which lists RSA as sole director and sole shareholder, extended over P9 billion in loans to Top Frontier before its listing.
The borrowings, used for working capital and acquisition of investments in shares of stock, bear interest ranging from 5.78 to 5.81 percent that “have no definite payment terms and are considered payable upon demand,” Top Frontier said.
“Professional fees were incurred for the feasibility studies rendered by Master Year in relation to the company’s acquisition and projects.”
For 2011 alone, Top Frontier reported having incurred P1.85 billion in financing charges from Master Year.
Top Frontier also disclosed that it had availed of a $650 million financing facility from an unidentified lender in June 2012, payable in June 2014 with an interest rate of LIBOR plus a hefty 5.5 percent a year.
The $650-million loan is secured by 1.05 billion of San Miguel shares out of the 1.57 billion shares that Top Frontier owns, as well as its two bank accounts.
According to Punongbayan and Araullo’s valuation, Top Frontier’s dollar-denominated facility balloons by over P1.1 billion for every P1 depreciation to the greenback.
In all, Top Frontier’s loans amounted to P40.7 billion as of end-August, with its total current liabilities greater than its total current assets by P41.7 billion, a four-fold jump from only over P10 billion as of end-2012.
Top Frontier reported earning a whopping P185 billion from its investments in 2010, but lost P86.6 billion in 2011, another P25 billion in 2012 and another P51.8 billion in the first eight months of 2013.
Total equity had dwindled from P257 billion in 2010 to P76.8 billion at the end of August 2013.
Top Frontier reported holding P711 million in cash as of end-August, up 250 percent from end-2012, mainly due to higher cash dividends received from San Miguel.
With the property distribution, the San Miguel conglomerate has de-linked itself with its major shareholders, spinning off as well in favor of Top Frontier the various speculative mining businesses that it had earlier planned to venture into.