Image via WikipediaMANILA, Philippines - SM Development Corp. (SMDC), the residential property arm of retail tycoon Henry Sy’s listed holding firm SM Investments Corp., will undertake a stock rights offering to shareholders to raise at least P5 billion.
In a disclosure to the Philippine Stock Exchange, SMDC said its board approved the issuance of 1.83 billion new shares to beef up its landbank and fund its projects.
Shareholders can avail of one right for every three shares held as of a record date yet to be set by the company.
SMDC stocks closed at P7.26 each yesterday, slightly lower from Tuesday’s close of P7.30.
SMDC is planning to acquire properties in Cebu and Davao to tap a wider clientele base, particularly overseas Filipino workers (OFWs).
Its affiliate, SM Land, has offered nearly P48 billion to develop a 33.1-hectare lot south of Fort Bonifacio in Taguig City into a mixed-use complex. Under the government’s joint venture rules for such Swiss challenges, SMLI will bag the contract if it can match the highest counter-offer.
The property is composed of lands presently occupied in part by the Army Support Command (ASCom) and Special Services Unit (SSU) and in part by the Bonifacio Naval Station and Philippine Marine Corps of the Philippine Navy.
Under the Bonifacio South master plan for the lot, the area would be developed into a medium- to high-density residential and mixed use complex with a strong institutional component, and has a maximum allowable gross floor area of 1.355 million square meters.
Last May, SMDC raised P10 billion from the issuance of corporate notes, which was more than three times oversubscribed by domestic institutional investors.
In the first half of the year, SMDC said its net earnings rose 24 percent to P1.3 billion on higher sales from its condominium projects. Revenues jumped 77 percent to P4.1 billion while net recurring income from real estate operations grew 47 percent to P1.1 billion.
SMDC raised P12.4 billion from pre-selling activities during the period, mainly coming from the Princeton, Light, Jazz, Sun and Wind projects under the SM Residences brand.
As of end-June this year, SMDC had 13 residential projects in the market. The company launched its affordable housing brand, My Place, with its pilot project in South Triangle on Panay Avenue in Quezon City.
The new project, My Place South Triangle, involves four condominium towers offering a total of 3,000 units with sizes ranging from 20 sqm to 40 sqm. Slated for completion in the first half of 2013, the project is estimated to cost around P2 billion.
Donnabelle L. Gatdula
September 9, 2010
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