MALL BUILDER SM PRIME HOLDings Inc. of Henry Sy Sr. is considering the possibility of borrowing P2 billion from banks to partially fund its aggressive mall expansion this year.

Sources said yesterday that the SM Group had received a proposal from Metrobank investment banking arm First Metro Investments Corp. (FMIC) – to raise P2 billion through a private placement.

A private placement is a direct offer of debt, equity or hybrid securities to a limited number of investors. SM Prime president Hans Sy earlier said the company would spend P35 billion over the next five years to put up new malls and upgrade existing ones.

For this year, SM Prime has lined up the completion of two malls, one in Taytay Rizal and Muntinlupa City. It will also expand malls in Cebu City, Pampanga and Fairview in Quezon City.

Also up for expansion is the SM Mall of Asia to include the ‘Esplanade Sunset Strip.’ SM Prime recently opened a new mall in Bacolod City: For next year, the company will focus on areas outside Metro Manila, with malls to open in Tarlac, Naga, Calamba and Baliwag, Sy said.

SM Prime derives about 60 percent of its revenue from Metro Manila operations and 40 percent from malls in the provinces. It has 28 malls to date. Sy had said the company had been acquiring land in the provinces for the expansion program.

He added that the Sy family was in the final stages of the study on whether to fold into SM Prime its three malls in China.

‘By the second half, we can come up with a decision on what’s going to be done,’ he said.

SM Prime earlier obtained shareholders’ approval to increase its capital to P20 billion from P10 billion.