SMIC sells $150M worth of shares to high-flying investors

Sy-led holding firm SM Investments Corporation (SMIC) said Friday it raised $150 million overnight through a top-up placement.

In a disclosure to the Philippine Stock Exchange, SMIC said it sold shares to institutional investors, who were unnamed, in a transaction that was “upsized (sic) due to strong investor demand.”

A top-up offering accelerates a transaction by allowing participants to skirt tedious registration process by letting a company to lend out secondary shares. The proceeds from the offering flow back into the company, which will then purchase the same number of primary shares to be issued at a later date.

“The proceeds of the placement will be used to refinance some of the company’s existing obligations and for general corporate purposes,” SMIC said. “The placement will also further enhance the free float and liquidity of SM share.”

UBS AG, Hong Kong Branch was tapped as the underwriter and placing agent.

In a separate disclosure, SMIC said the issuance involved 7.25 million primary common shares priced at P900 apiece.

The top-up placement, along with a 259,838 shares bond conversion in July 26 to 30, hiked SMIC's outstanding common shares to 796.012 billion.

Sought for comment, PAPA Securities Corp. analyst Joanna Capiral said share prices “tend to move to the offer price in a private placement,” referring to the 5.98-percent decline in SM issues to P904 apiece as of 1:40 p.m. from its close of P961.50 on Thursday.

She, however, remained confident that SMIC “fundamentals are still good.”

Capiral said the top-up placement will allow a more active stock price for SMIC, adding that “it will gear towards its fair value.”

Additional liquidity will likewise shield the SMIC shares from “volatile price movements,” she said, noting that SMIC shares' support and resistance are at P880 and P970. — KBK, GMA News