By Neil Jerome C. Morales (The Philippine Star) | Updated September 7, 2013 - 12:00am
MANILA, Philippines - Two property units of mall and banking conglomerate SM Investments Corp. (SMIC) have filed a petition to voluntarily exit the local bourse.
The move to delist from the Philippine Stock Exchange (PSE) forms part of SMIC’s consolidation of its property businesses.
“We respectfully submit this petition to voluntarily delist the shares of SM Development Corp. (SMDC) and Highlands Prime Inc. (HPI) from the registry of the PSE,” the companies said in separate disclosures.
SMDC and HPI said private company SM Land Inc. completed the tender offer for both companies’ shares “as a part of its efforts to reorganize and consolidate the real estate holdings and interest of the companies that are controlled by the SM Group.”
On Aug. 12, SM Land secured 98.9 percent of SMDC and 99.85 percent of HPI. SM Land had planned to acquire 34.82 percent or 3.22 million shares of SMDC and 100 percent or 2.24 million shares of HPI through a tender offer that started on June 4.
Last month, the PSE implemented a trading suspension on the trading of HPI and SMDC shares, after both companies failed to meet the 10 percent minimum public float requirement.
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In May, SMIC announced the merger of its real estate businesses, creating the most valuable property firm in Southeast Asia.
The P279-billion transaction involves several steps. First, private firm SM Land will acquire HPI and SMDC in exchange for shares in shopping mall developer SM Prime Holdings Inc. (SMPH). Both SMDC and HPI will then exit the local bourse.
SM Land will then merge with SMPH, which will be the surviving entity. SMPH will also acquire specific real estate companies and assets currently held by SMIC such as the SM Mall of Asia complex, Pico de Loro and SM Hotels and Conventions Corp.
The transformed SMPH will have P284 billion in current assets from P148 billion, revenues of P58.4 billion from P30.7 billion, net income of P17 billion from P10.9 billion and a total landbank to 920 hectares from 110 hectares.
The consolidated property group’s pro-forma earnings hit P7 billion in the first half, up 14 percent from a year ago, while revenues jumped 14 percent to P31 billion.