When Ramon Ang set San Miguel Corp. on its current path of aggressive diversification, he told an incredulous public that he would double the revenue of what was then Southeast Asia’s largest food and beverage company by 2015.
By all indications, SMC will hit that target by the end of this year as the conglomerate is set to continue with its acquisition binge, just weeks after sealing a partnership that gave it control of Philippine Airlines.
The total project cost, he said, including the elevated tollway, a modern air terminal, runways and the acquisition of land will be in the vicinity of $5 billion.
There are, in fact, a number of doubters in the local business community—all of whom declined to go on record—who question the group’s strategy, especially its reliance on leverage to finance its buyouts.
But the SMC chief is unfazed, flipping out a chart to show that the group’s ratio of net debt to earnings before interest, taxes, depreciation and amortization (Ebitda) stands at only 2.14 times—only about a third of the ratio of 6 times the group is allowed to take.
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