E-Malt.com News article: Philippines: San Miguel Brewery’s bond issue postponed

The Philippine Securities and Exchange Commission has approved Iconic Beverages, Inc.’s hike in its capital stock by almost 10,000 times to facilitate the transfer of San Miguel Corp.’s beer brands and related intellectual property rights to it, Business World Online posted on March, 5.

Iconic Beverages, which San Miguel plans to sell to beer unit San Miguel Brewery, Inc., increased its capital stock to over P10 billion from only P1 million, documents from the corporate regulator showed.

San Miguel group issued several of its beer brands and related trademarks to Iconic Beverages in exchange for more than 99.99 million of the new capital stock worth P100 each. The firms approved the exchange on Dec. 16, the same date the Iconic Beverages board gave the go-signal for the capital hike.

San Miguel transferred the intellectual property rights of 40 of its beer-related products to Iconic Beverages, including the designs for popular brands like San Miguel Pale Pilsen, San Mig Light, San Mig Strong Ice and Red Horse.

In January, SMB agreed to pay P32 billion to acquire its parent’s beer brands and related intellectual property rights. The company will also pay P6.8 billion worth of properties owned by the group.

The debt-free SMB plans to finance those acquisitions by selling bonds of the same amount, which will be the highest corporate debt issue by a local company once completed.

At the same time, San Miguel Brewery’s proposed P38.8-billion bond has been pushed back pending approval by the Securities and Exchange Commission. A SEC official said the bond application was not on the agenda.

The brewer said it would no longer access the dollar bond market if it raises the full from the local bond market.


06 March, 2009