SM Prime Holdings to raise up to P70B from retail bonds

Listed mall and office builder SM Prime Holdings Inc. plans to raise up to Php70 billion through retail issue to partially fund its Php180-billion capital expenditures over the next three years.
SMPH executive vice president Jeffrey Lim said they decided to take the shelf registration of these bonds with the Securities and Exchange Commission (SEC).
“I think that’s the best option because we don’t need to issue preferred (stocks). There is enough liquidity for us to issue that,” he told reporters after the company’s stockholders’ meeting on Tuesday.
Lim said the tenor of the bond would be for a period of up to 10 years, with first tranche to be issued toward the third quarter of the year.
The company is aggressively expanding at home and abroad in line with its goal to double its net income to Php32 billion by 2018.
“If we look at the numbers we released last year and the opening plus the launching of the residential developments which includes medium-rise buildings and horizontal development that will be mostly in the provincial area plus the construction of two BPO (business process outsourcing) offices in the Mall of Asia area, we believe that we should be on track to be able meet to double our income,” he said.
Lim noted that malls also continue to deliver good returns.
In 2016, SM Prime will open five new malls in the Philippines, and expand one mall in Pampanga. The project, expected to be completed by the third quarter of 2016, entails the construction of office buildings catering to business process outsourcing industry locators.
It has also opened six malls in China.
Lim also bared the company will launch 2,000 units of economic housing this year, comprising half of total launches for the year.
“If the 2,000 (units) will do well, we can ramp up that to even 5,000 next year depending how we will be able to execute,” he added.
In 2015, SM Prime reported recurring net income of Php20.9 billion, up by 14 percent from last year on the back of consolidated revenue growth reaching Php71.5 billion. (PNA)