MANILA, Philippines - Real estate firm SM Development Corp. is planning to raise up to P10 billion ($227 million) from a private placement of new shares to fund its expansion and increase public float.
The new shares would likely be sold to select institutional investors overseas within the first half of the year, chief executive Henry Sy Jr said.
The deal would expand the firm's public float from around 16% at present.
"We want to widen the public float because right now, they (investors) always complain that shares are tightly held. We're trying to see to it that public float is around 30%," Sy said, adding the firm has yet to decide on the price.
Conditions for raising equity have improved in the Philippines and other emerging markets in Asia since last year, thanks to a flood of liquidity, low interest rates and strong economic growth.
SM Development, a unit of conglomerate SM Investments Corp. of the country's richest man Henry Sy, had raised P11.7 billion from a stock rights offer in October to raise funds for land acquisition and real estate development.
SM Development announced in November it would start work on its first residential apartment project in China this year. It also plans to launch 10 new projects in the Philippines in 2011 at a cost of around P20 billion.
"In China, we have to get all the permits but we're starting already. We're rushing it up because we'd like sales to increase and we have to keep the momentum going. Hopefully in China, it will further support our growth," Sy said.
Net income at SM Development was forecast to hit a little over P4 billion this year, or more than 33%, from a projected net profit of P3 billion last year, Sy said.
Shares in SM Development rose 1.38% to P8.08 on Friday against a 1.81% drop in the property sub-index.