By: Krista Angela M. Montealegre, InterAksyon.com November 25, 2013 12:16 AM
MANILA – The food unit of San Miguel Corp (SMC) is keen on selling more shares next year, as the company looks at acquisitions to expand its operations both here and abroad.
San Miguel Pure Foods Co Inc president Francisco Alejo III last week told reporters that the company plans to widen its public ownership through a follow-on offering. Purefoods' public float stands at 14.6 percent.
SMC president Ramon “Ang has already said he is willing to go as high as 45-49 percent," Alejo said, when asked how big a stake in Purefoods would be put on sale.
"We consider if there is an interested party which can provide inputs in running the food group. Of course, we will welcome if there is such. I cannot tell you if there's such a party so we are considering the possibility of [a] follow-on offering," Alejo said.
Last year, Purefoods avoided automatic delisting with a P6-billion equity deal that boosted its public float above the 10-percent minimum public ownership rule. The company sold its shares at P240 each during that time, but Alejo said the offer price for its proposed follow-on offering should be higher, citing the firm's improved financial performance.
However, Purefoods' net income attributable to equity holders dropped six percent to P2.75 billion at end-September from P2.92 billion a year ago, even as sales grew three percent year-on-year to P71.41 billion.
The company expects this year's sales to surpass turnover in 2012, Alejo said. For 2014, sales are seen to grow at a 10-15 percent pace.
Aside from the share sale, Purefoods will also beef up its war chest from the proceeds of the sale of its stake in Meralco to JG Summit Holdings Inc. The San Miguel group will receive P72 billion from the disposal of its combined 27 percent stake in the country's biggest power distributor.
Purefoods intends to use the cash raised from these transactions to finance the expansion of its fast-moving consumer goods business and acquisitions—both local and international—that will boost its value-added business.
"We have a very good distribution network so we feel that if there are opportunities for synergies, we will seriously consider those kinds of investments," Alejo said.
Purefoods is gearing up for the Asean Free Trade Area by 2015, by which time tariffs are poised to go down significantly. This will become a challenge for the company since it will make importing raw material less costly.
"We're scouting the market. We're looking at either being able to export our own products or opportunities to bring in products that can compete here locally -- we will do that," Alejo said.
"You know San Miguel is a big player in the poultry business with Magnolia chicken. We feel that we can compete and provide the right efficiency to lower our production cost," he added.