SM Development Corporation, the residential property development arm of SM Investments Corporation, is planning to raise fresh funds from a stock rights offering amounting to 1.83 billion shares with a market value of P13.3 billion.

In a disclosure to the Philippine Stock Exchange, SMDC vice president Jose Gabionza said proceeds from the offer will be used by the company for its land banking and project development expenses.

The firm’s board has approved a stock rights offering at the rate of one right for every three shares held. While the price has yet to be determined, the offer shares are worth P13.3 billion based on the last closing price of P7.26 for every SMDC share.

SMDC said earlier this year that it is considering a primary and secondary stock offering sometime in the third quarter in response to demand from foreign investors and to increase market liquidity.

The SM group currently controls about 84 percent of SMDC and may initially divest a five percent stake but may raise this to about 10 percent depending on demand from the market, said SMDC president Rogelio Cabunag.

SMDC had already raised P4.8 billion from a stock rights offering in January wherein SM Land Inc., a unit of SM Investments Corporation, had subscribed to shares worth P3.11 billion.

The firm also raised P10 billion from a corporate notes issue and will be spending the bulk of the proceeds for its landbanking activities.

Cabunag said they are looking for land to acquire in the Fort Bonifacio area that may be sold by the Bases Conversion and Development Authority for development into the more upscale SM Residences.

BCDA is offering a 5,000 square meter lot to SMDC which already has a 4,000 square meter lot in the area. The lot already owned by the company will be developed sometime next year, Cabunag said.