San Miguel plans to sell another 25 pct of food unit
MANILA - Philippine conglomerate San Miguel Corp. is planning to sell up to a quarter of the outstanding shares of its food unit next year in a follow-on offer to raise funds for the group's expansion, company officials said on Wednesday.
San Miguel's President Ramon Ang and Chief Financial Officer Ferdinand Constantino told Reuters that San Miguel Pure Foods Co Inc. was expected to end 2013 with double-digit revenue growth, up from 4 percent growth in the first half, boosted by the strength of the economy.
Higher revenues should help San Miguel to sell an additional 25 percent stake in Pure Foods at a premium to market prices, Constantino said. San Miguel raised around $150 million last year when it sold a 15 percent stake in the food unit for P240 ($5.48) per share.
"It should be higher, much higher than that. If we do it next year, it could command a good price," Constantino said, referring to the share price.
Reuters calculations, based on current market prices, show San Miguel stands to raise at least P10 billion ($228 million) from the follow-on sale, which would cut its holding in Pure Food to around 60 percent.
San Miguel also expects its beer business to recover in the second half after flat sales in the first six months of the year due to the impact of a higher tax on tobacco and alcohol products. San Miguel Brewery is partly owned by Japan's Kirin Holdings.
"We are very happy that the food group is doing very well," said Ang, who is the chief architect of the group's aggressive expansion in the last five years.
The 120-year-old San Miguel has been investing heavily in heavy industries such as power, mining and infrastructure as it eeks faster growth after dominating the local market for food and drinks.
Food and beverage combined comprised just about 26 percent of the group's revenue in 2012 from around 90 percent just three years earlier.