San Miguel Brewery bondholders give modified terms the thumbs up

More than three-fourths of San Miguel Brewery Inc.’s bondholders agreed to adjust the current ratio and terms of its P38.8-billion float, the company said Wednesday.   Bank of the Philippine Islands-Asset Management and Trust Group, the bonds’ trustee, certified that "record bondholders representing or accounting for 76.92 percent of the aggregate principal amount of the bonds have consented to the replacement of the minimum Current Ratio (Current Assets/Current Liabilities) of 1:1 in the terms and conditions of the bonds, with a minimum Interest Coverage Ratio (EBITDA/Interest Expense) of 4.75:1," San Miguel Brewery said in a statement to the Philippine Stock Exchange.   The approval paved the way for the execution of the supplemental agreement that amended the trust agreement covering the bonds, the company said.   "SMB believes that the minimum Interest Coverage Ratio is a more appropriate measure in monitoring the financial health of the company as it gives an indication of whether SMB has sufficient margin in operating profit to cover increases in the cost of debt," the company said.   Meanwhile, the consent fees for amending the bond terms will be paid within three business days from the execution of the supplemental agreement.   SMB said on Tuesday reported its 2011 net income improved 17.4 percent to P12.2 billion from P10.4 billion year-on-year. Consolidated net sales rose 6.3 percent to P71.9 billion owing to "increases in sales volume, for both domestic and international operations, and higher selling prices." — CMS/VS, GMA News