SM Investments Corp. (SMIC), the listed investment holding company of retail tycoon Henry Sy, has approved a restructuring plan aimed at simplifying the company’s structure by grouping sub-sidiaries, affiliates and other assets together in their respective lines of business or interest.

In a statement issued yesterday, SMIC said its objective is to re-align the ownership of shares and properties within the SM group to follow major business lines, namely retail merchandising, mall operations, banking and financial services, real estate, and private investments.

Once completed, SMIC will be able to unlock its corporate value and become even more transparent to the investing public. It will also help investmentanalysts forecast the company’s future earnings and place a realistic value on its assets.

Funding options for future projects will likewise broaden as the specific lines of business can then tap specialized investment funds that match their specific areas of interest.

‘SMIC has become one of the country’s largest conglomerate in the Philippines. Such a condition merits greater simplicity in the organization to better achieve efficiencies in SM and provide greater clarity in our financial reports. We aim to substantially execute the plan by end of this year. This signals our intent to put priority on increased transparency as one of our primary responsibilities to our minority shareholders,’ SMIC president Harley Sy said.

SMIC said it will complete the reorganization by the end of the year, paving the way for a more streamlined and transparent holding company that will meet the growing needs of its markets and shareholders.

Under the plan, two new companies will be formed before the end of the year. One of these is SM Retail Inc., which shall serve as the holding firm for the group’s retail operations which currently account for more than 70 percent of SMIC’s total revenues. It will have under its wing the companies operating the SM Department Stores, SM Supermarkets, and the SM Hypermarkets.

Another company will be formed called SM Land Inc. which will hold various assets in real estate projects, subsidiaries, and affiliates of SMIC in residential, commercial and ecotourism-related development. These include companies such as SM Development Corp. (SMDC) and Highlands Prime Inc.

SMDC is SMIC’s development arm for high-rise residential, subdivision, and commercial space for sale and/or for lease while Highlands Prime is a high- and low-rise residential developer in Tagaytay Highlands.

SMIC said SM Prime Holdings will continue to be the sole mall operator of the group. It accounted for 18 percent of SMIC’s revenues last year and 53 percent of net profits.

However, SM Prime also has huge inventory of raw land and land where its malls are currently situated. Being in prime locations all over the country, these lots provide high-rise development opportunities as well in the future for SM Prime, making it a vital partner in either the high-rise residential or commercial projects of SMIC’s property group.

The banks, on the other hand, namely Banco De Oro and China Banking Corp., will continue to operate independently given their solid performance in the market and strong profitability. Last year, the banks contributed five percent and 22 percent to SMIC’s revenues and net income, respectively.