Del Monte Pacific plans P16.7-B IPO of Philippine unit

Del Monte Pacific Ltd. said Tuesday it is planning to stage an initial public offering (IPO) for wholly-owned Philippine subsidiary, Del Monte Philippines Inc.

In a regulatory filing submitted to the Philippine Stock Exchange by Del Monte Pacific chief legal counsel Antonio Eugenio Ungson, the company said it has filed application documents for the proposed IPO of Del Monte Philippines on February 5.

Del Monte Pacific is planning to offer 559,464,000 shares or 20 percent of Del Monte Philippines’ total existing shares at an approximate price of P29.88 per share to raise as much as P16.716 billion.

“The market is starving for the first IPO of the year and Del Monte could be a welcome addition,” Regina Capital Development Corp. said in a separate market commentary.

“Depending on the pricing and the growth prospects of the company then it would be attractive enough for both retail and institutional clients since they will be raising more than $300 million.”

The offering is subject to requisite regulatory approvals and market conditions, the company said.

“The company aims to raise funds from the proposed public offering to partially prepay/repay certain loan facility/ies,” Del Monte Pacific said.

“The prepayment of such loans will allow the Del Monte Pacific Ltd. group to deleverage and strengthen its balance sheet. Such prepayment is allowed under the current loan facility agreements without any fee or penalty,” the company said.

The balance of proceeds, if any, will be used for general corporate purposes, according to the company.

“The company could readily use the proceeds since the agricultural sector has exhibited weak growth compared to the other constituents of GDP (gross domestic product),” Regina Capital noted.

Del Monte Pacific is listed on both the Singapore Mainboard and the Philippine Stock Exchange under a dual listing scheme.

The company has tapped BDO Capital & Investment Corp. as issue manager, sole global coordinator, and sole bookrunner for the IPO.

“The company will make further announcements as and when required and/or material developments arise in respect of the offering,” Del Monte Pacific said. —Ted Cordero/VDS, GMA News