Vol. XXI, No. 208 [ Business World Online ]
Friday, May 23, 2008 | MANILA, PHILIPPINES
SM PRIME Holdings is set to absorb three malls in China after the Securities and Exchange Commission approved the P8.5-billion acquisition.
In a disclosure, SM Prime Executive Vice-President Jeffrey C. Lim said it had obtained the approval to fully acquire Affluent Capital Enterprises and MegaMake Enterprise Ltd. in exchange for 912.89 million of its shares.
Affluent Capital and MegaMake Enterprise are the holding companies that own the three SM malls in China, which are located in the cities of Jinjiang, Xiamen and Chengdu.
SM is the Philippines’ largest mall operator controlled by retail magnate Henry Sy.
The share-swap agreement was valued at P8.5 billion, with Citigroup Global Markets Ltd. and Macquarie Securities (Asia) Pte. Ltd. acting as financial advisers.
Earlier, SM Prime said the acquisition would allow it to gain a foothold in China’s fast-growing economy and use this as a platform for long-term growth outside of the Philippines, where it is the dominant shopping mall developer.
SM Prime also seeks to build its fourth mall in Chongqing, China by the third quarter as it tries to build brand equity within the Asian region.
Domestically, it has allotted P33 billion as capital expenditure in the next five years. SM Prime aims to end this year with 33 malls.
SM Prime will spend P6 billion for the development of three new malls — SM Supercenter Rosales in Pangasinan, SM City Baliuag in Bulacan and SM City Marikina — and for the expansion of SM City Fairview and SM Megamall.
For the first quarter, the company said net profit rose by 7% to P1.6 billion, boosted by higher rental revenues from the three malls opened last year.
The Sy-controlled Shoemart, Inc. and SM Investments Corp. own 47.7% and 21.3%, respectively, of SM Prime.
Yesterday, SM Prime shares closed 20 centavos lower at P7.80 apiece. — Lovely Nica P. Lee
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