By Zinnia B. Dela Peña (The Philippine Star) Updated December 31, 2009 12:00 AM
MANILA, Philippines - SM Land Inc. is subscribing to P4.81 billion worth of new shares of SM Development Corp. (SMDC), the residential property firm of the family of retail tycoon Henry Sy.
Documents filed with the Securities and Exchange Commission (SEC) show that SM Land is subscribing to 887.41 million SMDC shares which will come from the company’s proposed stock rights offering. The shares will be sold at P3.50 each.
SM Land, which owns 64.58 percent of the outstanding shares of SMDC, will subscribe to its pre-emptive right and any common shares which remain unsubscribed from the rights offering under the same terms and conditions of the issue.
SMDC is raising P4.795 billion from a pre-emptive rights offering involving 1.37 billion shares.
Shareholders can buy one rights share for every three shares held as of Dec. 7, 2009 at P3.50 apiece.
The rights offering is scheduled to run from Jan. 4 to 8 while the listing of the shares has been tentatively set on Jan. 18.
Proceeds from the issue will be used for landbanking and for other general corporate purposes.
BDO Capital and Investment Corp., also owned by Sy, will serve as underwriter for the rights issue.
SMDC currently has seven on-going projects – the fifth cluster of Chateau Elysee (a six-cluster mid-rise condominium project in Parañaque City) which is 88 percent complete; Berkeley Residences in Katipunan Road, across Miriam College and Grass Residences beside SM City North EDSA (with the first tower 47 percent complete); Sea Residences near the Mall of Asia Complex in Pasay City and Field Residences in Sucat, Parañaque.
Other projects slated for launch this year are Princeton Residences (a 37-storey condominium building located in 2,400 square meter property along Gilmore St., Quezon City), Sun Residences beside Welcome Rotonda in Quezon City, Jazz Residences along Jupiter St., Light Residences in Mandaluyong City and Wind Residences in Tagaytay City.
SMDC has earmarked P7.2 billion for capital expenditures this year or 40 percent higher than what is spent in 2008. Around 80 percent of the capital budget will be sourced from internally generated funds while the remaining 20 percent will come from borrowings SMDC reported a net income of P1.4 billion in the first nine months of the year, more than 60 times the P23 million recorded the same period a year ago on the back of robust sales and higher completion rates of its various projects.
Consolidated revenues surged 78 percent to P4.1 billion during the period under review, mainly due to the recovery in the financial markets. EBITDA stood at P1.6 billion, translating to an EBITDA margin of 42 percent.
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