GMA ENDORSES SHOEMART INVESTMENTS IPO
MANILA, February 3, 2005 (STAR) By Marichu A. Villanueva - President Arroyo endorsed yesterday the planned P17.25-billion initial public offering (IPO) this year of the SM Investments Corp. (SMIC), the holding company of the Shoemart chain of malls all over the country.
President Arroyo, during an interaction with media at the Binmaley Senior Citizens Building yesterday, said SMís bid to raise more capital through IPO is the biggest so far slated this year.
The SM Group is owned by Filipino-Chinese taipan Henry Sy.
President Arroyo cited the IPO plans of SM in an effort to explain in laymanís terms the significance of the 6.1-percent growth in the countryís gross domestic product (GDP) for the whole year of 2004.
"The growth of the GDP came from services sector. The fastest growth came from the call center industry, and the second biggest was the retail trade," President Arroyo noted.
"Thatís why SM will sell shares in our stock markets," the President pointed out.
The SM Groupís retailing business began in 1945 when its founder, Henry Sy Sr., first established a small shoe store in Carriedo, Manila. The original Shoe Mart, incorporated in March, 1960, was the Sy familyís first major step into the retailing business.
Last Jan. 11, the SMIC board approved an increase in the companyís authorized capital stock from P5 billion to P6 billion and the change of the par value of common stocks from P100 to P10 per share. It also approved the conversion of 19 million issued and outstanding preferred shares into common shares and the reclassification of the 10 million un-issued preferred shares into common shares.
The SMIC reportedly intends to maintain its leading market share in the shopping mall sector by continuing to expand retail activities into major centers of population in Metro Manila and other provinces. In fact, the "biggest mall in Asia is being put up by SM at the reclamation area in Roxas Boulevard.
The SMIC will offer a total of 75 million new shares at P230 per share, substantially higher than the adjusted book value per share of the outstanding shares.
The companyís net book value based on its consolidated financial statements as of end-Dec. 31, 2004 was P35.27 million or P83.57 per share at par value of P10 per share.
Reported by: Sol Jose Vanzi
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