SBC to generate P37B in fresh capital through Japanese tieup

Security Bank Corp. (SBC) said it expects to raise P37 billion in new capital from a partnership deal with the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) in which the Japanese bank will take a 20 percent stake in the local bank.

The deal is expected to be completed by the first half of this year.

Under the deal, SBC will issue 150.7 million common shares to BTMU from the unissued authorized shares of SBC at a price of P245 per common share.

SBC will also issue 397.17 million voting preferred shares at 10 centavos per share, the dis 200 million of which will be shares to BTMU; and 197,168,891 voting preferred shares to SBC chairman Frederick Dy or to parties that he will designate.

SBC said the deal when completed will result in BTMU owning a 205 voting interest in SBC.

“This investment will provide capital and long-term funding support to SBC for accelerating its growth strategy, including expansion of its branch network and increasing its penetration of the retail market. The partnership will allow SBC to leverage on BTMU’s extensive relationship with Japanese corporates, global network and expertise to tap new niche markets,” SBC said in a statement.

The issuance of shares to BTMU is subject to approval of the Bangko Sentral ng Pilipinas (BSP).

The listing of the newly issued common shares is also subject to shareholders’ and Philippine Stock Exchange (PSE) approval.

SBC said it expects to get shareholders’ approval on the new float in its April 26 annual meeting and that it will seek PSE approval afterwards.

SBC said the breakdown of its new capital will be from BTMU worth P36.94 billion from the combined sale of common and preferred shares.

It also expected to receive P19.7 million from shares issued to Dy or his nominee. Total payment to be received by SBC for all issuances is P36.96 billion in cash.

The issue value of the common shares was determined by BTMU based on the long-term intrinsic value it saw on SBC.

SBC said the proceeds from the transaction will be used to fund the expansion of branch network, upgrade its information technology systems and for other investments. RIZA LOZADA