AMID the prevailing volatility in the equities market, San Miguel Brewery Inc. (SMB) completed a successful market debut as its share price jumped 6.25 percent to P8.50 each at the end of its first trading day yesterday.

SMB, the largest producer of beer in the country, sold 770.524 million new and secondary-held shares at P8 a piece through a public offering. The IPO generated gross proceeds of P6.2 billion, of which P616.4-million went directly to the company for its expansion projects, while P5.5-billion went to parent firm San Miguel Corp. (SMC) to help pay off debts.

In a briefing, SMC vice chairman and president Ramon S. Ang said retail tycoon Henry Sy “bought shares in the company for a few hundred million of pesos because he has strong confidence in our business.”

He said their intention was to offer the SMB shares mostly to Filipino investors so that they will be able to partake of the company’s strong cash dividend. SMB, which completed a P6.16-billion initial share sale last month, controls 95 percent of the beer market. The brewer posted a 37-percent growth in first-quarter profit to P2.5 billion, spurred by an 18-percent volume expansion.

“Investors now have the choice of switching out of San Miguel,” said Astro del Castillo, managing director at First Grade Holdings Inc. “It might be better for investors to hold shares in SMB instead, because as the operating company, it is the one that makes the money.”

“We recommend current shareholders of San Miguel shift to San Miguel Brewery,” said Peter Lee, senior investment officer at IGC Securities Inc. “SMB is a pure play in the best part of San Miguel without the overhang from its noncore businesses and planned new ventures.” 

“We didn’t have any intention of inviting big foreign or strategic investors [for the IPO]. Kirin, for instance, we did not invite them in this purpose,” Ang said. Kirin, one of the largest conglomerates in Japan, owns 20 percent of SMC. 

After the brewery business, SMC will implement the public offering of its packaging operations and secondary shares sale of San Miguel PureFoods. Both activities are scheduled in the first quarter of 2009. 

“Our plan for the packaging is to sell at least 20 percent via the IPO. For the food business, after we are done with the consolidation of all our food units under the listed San Miguel PureFoods, we will do a secondary offering,” Ang explained. 

He said SMC is willing to sell up to 49 percent of San Miguel PureFoods to the public and keep the majority stake of 51 percent. “If we sell more shares, we can raise more money to pay debt and get in to more profitable businesses,” he said. 

SMC is convinced of the many business opportunities in the country especially in this time of crisis.  

“We are concentrating our energy now in the Philippines. We are interested to invest in anything that will enhance shareholders’ value,” Ang said.

Last November, SMC sold its two companies in Australia for P47 billion ($1.13 billon).

It divested its entire 100-percent ownership in National Foods, Ltd. to Kirin Holdings Co., Ltd. The purchase price of $2.6 billion for the dairy and fruit-juice maker includes interest-bearing debt of about $1.7 billion. 

Minus the debt component, SMC got cash of around $830 million from the sale of one of Australia’s largest-food companies. 

SMC also sold its premium Tasmanian brewer J. Boag & Son to Lion Nathan Ltd., an Australian alcoholic beverages company, for $300 million. It was SMC’s first major acquisition under the management of Cojuangco in 2000.

Philippine retailer Henry Sy, owner of the nation’s largest grocer and department store chains, are among the investors that bought shares in San Miguel Brewery. Sy sold his 10.8-percent stake in San Miguel in October to the company’s retirement fund.

San Miguel is raising funds to pay debt and finance its expansion into faster-growing energy, mining and property industries to cut its dependence on food and drink.

The company plans to sell shares in its packaging and processed food units in the first quarter of 2009.

San Miguel posted higher sales and profit in the first quarter. “We posted quite strong figures: double digit growth both in sales and profit,” SMC said.

It looks like business magnate Alfredo M. Yao may be softening his stand on buying low-cost carrier South East Asian Airlines Inc. (Seair)

Brewer’s shares up 6% on first trading day

AMID the prevailing volatility in the equities market, San Miguel Brewery Inc. (SMB) completed a successful market debut as its share price jumped 6.25 percent to P8.50 each at the end of its first trading day yesterday.

THE Philippine Long Distance Telephone Co. (PLDT) Group will not hike yet investments in mobile television services even if commercial operations are expected to start within this year.

Globe Telecom will soon carry Apple’s iPhone handset, the cellular firm said.

“Globe, SingTel, Bharti Airtel and Optus announced that they have signed an agreement with Apple to bring the iPhone to the Philippines, Singapore, India and Australia later this year,” the two-paragraph statement on Globe’s web site stated.

BUSINESS process outsourcing firm StarTek Inc. said soaring inflation, wage and attrition rates in the country are not as “painful” as in the US, boosting confidence of executives on the center the company is opening late this month.

NEW YORK—Tribune Co. agreed Sunday to sell the Long Island newspaper Newsday to Cablevision Systems Corp. for $650 million.

The deal—structured as a tax-free joint venture—would give Tribune $612 million in cash to pay down its nearly $13-billion debt.

THE obvious sign of bad times, it seems, is taking its toll on the market as shown by what KS Investments Pte. Ltd. of Singapore, a holding company investing in ship building, is about to undertake: it is set to take out of the Philippine Stock Exchange its unit, Keppel Philippines Marine Inc. (KPM).