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San Miguel Corp. (SMC.PH) will kick off an 80.03 billion peso ($1.9 billion) preferred share sale Monday--the Philippines' largest capital raising of the year so far--as part of a plan to redeem preferred shares issued to the shareholders, including the government, three years ago.

San Miguel said Friday it plans to sell 1.07 billion series 2 preferred shares at PHP75 each. The offer period is expected to end on Sept. 14, with the shares likely to be listed on the Philippine Stock Exchange by Oct. 12.

Hongkong and Shanghai Banking Corp. Ltd. has been appointed sole issue manager for the deal, and 10 local and foreign financial institutions are joining HSBC as bookrunners.

San Miguel said it will use the proceeds to redeem PHP72.79 billion of existing preferred shares. It may also use PHP5.66 billion to partially repay PHP13.99 billion in short-term debt.

The company issued the existing batch of preferred shares to investors in exchange for their common shares back in October 2009 in a bid to ease their concerns about San Miguel's plans to diversify into heavy industry.

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