MANILA, Philippines – As its market price continued to rise amid a bull run, SM Development Corporation has decided to set its stock rights offer price at P6.38 per share, well above its earlier price range, for a higher total offering size of P11.69 billion.

In a disclosure to the Philippine Stock Exchange, SMDC said the offer price still represents a discount of 18.19 percent to the 15-day volume-weighted average price of SMDC shares from the trading days covering August 26 to September 17, 2010.

SMDC is offering 1.83 billion shares stockholders at the rate of one rights share for every three common shares held. The offer price range was earlier set between P5.45 and P5.73 per share. Closing price was P9.00 per share yesterday.

The residential property development arm of SM Investments Corporation, SMDC plans to launch its stock rights offering on October 18 to October 22, 2010 for stockholders as of October 6. The shares will be listed at the bourse on November 3, 2010.

Stockholders subscribing to the issue will have to pay for only half of the shares upon subscription while the balance of 50 percent will be paid in full on the sixth month from the listing date although they may opt to pay in full on the third month after listing.

SMDC president Henry Sy Jr. said proceeds from the offer will be used by the company for its land banking and project development expenses.

“Our landbanking is not for the long term. We will buy land that we will immediately using for the development of more projects,” he explained.

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.

The firm had already raised P4.8 billion from a stock rights offering in January. It also raised P10 billion from a corporate notes issue and will be spending the bulk of the proceeds also for its landbanking activities.

SMDC is 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. (JAL)