Delisting an option for San Miguel brewery
It is Japanese firm Kirin Holdings that should sell shares in San Miguel Brewery, not the local majority holder, to meet the minimum public ownership requirement of the Philippine Stock Exchange, says SMB chair Ramon Ang

MANILA, Philippines – The country’s largest conglomerate remained firm in its decision to retain control in the country’s largest brewery firm if its Japanese partner does not budge to meet the requirements of the local stock exchange.

“If Kirin [Holdings] will not agree to sell shares [in listed firm San Miguel Brewery], we’ll be forced to delist,” San Miguel Corp. president Ramon Ang told reporters at the sidelines of the annual stockholders meeting of the conglomerate’s brewery unit.

San Miguel Corp and Kirin have yet to agree on who-will-give-up-how-much in San Miguel Brewery as the Philippine Stock Exchange’s requirement that listed firms must have at least 10% public investors nears.

The public currently has a paltry 0.6% stake in the country’s largest brewery firm after San Miguel Corp diversified away from its core food and drinks business and into heavy industries.

After a series of deals, San Miguel Corp sold a total of 48% stake in the brewery firm to Kirin, which restructured its Philippine investment from focusing on the parent and owning direct stakes in San Miguel Brewery. The local conglomerate then reduced its stake to 51%, still retaining control.

Three options

The two camps are set to meet to decide on how to move on.

“I am going to Tokyo this weekend to meet with Kirin to discuss compliance to the MPO (minimum public offering),” Ang added.

“If Kirin cannot decide, we’ll [decide to meet] PSE [requirements].

Earlier, Ang said that both camps have 3 options: “sell down together,” issue preferred shares, or go for delisting.

Ang added, however, that Kirin is “very bullish” in its investment in San Miguel Brewery, one of the Japanese firm’s key investments outside its homebase.

Public float

This thorny issue of having to loosen a controlling group’s grip on a listed firm becomes more pronounced as the deadline to meet the required free float level — or face suspension starting next year and eventual delisting from the exchange — looms.

The San Miguel group is one of the most prominent since trades for its parent firm and Petron Corp, its oil refinery and retailing unit, account for a tenth of the trades in the exchange.

Parent firm San Miguel Corp has already increased its public float to 24% in 2011, while Petron’s employee retirement unit sold its shares in the country’s biggest oil refiner and retailer in February to increase outsiders’ stake to 14.68% from previous 7.5%.

The public ownership base of members of the San Miguel group are at these levels

  • San Miguel Corp – 24% publicly held
  • Petron Corp – 14.68%%
  • San Miguel Brewery Inc. – 0.6%
  • Ginebra San Miguel, Inc. – 21%
  • San Miguel Purefoods Co. Inc. 0.1%
  • San Miguel Properties Inc. – 0.1%.

–, with reports from Katherine Visconti

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