Pepsi to use P2.28 billion from IPO for capex

Pepsi-Cola Products Philippines, Inc., the local franchise holder of soft drink brand Pepsi, will use the funds from its planned initial public offer for capital expenditures in the next two years. The IPO plan, which was approved by the Securities and Exchange Commission Thursday, states that the net proceeds of P2.28 billion will be used for the beverage firm’s capex program for 2008 and 2009. Pepsi Philippines budgeted P910 million to add non-carbonated beverage production facilities at several plants, P455 million to expand carbonated beverage production at plants currently running near capacity, P455 million to add PET production capacity at several plants and P455 million to launch new products. Pepsi Philippines is the licensed bottler of PepsiCo beverage in the Philippines. It manufactures a wide range of carbonated and non-carbonated beverages and distribute them to retail outlets throughout the Philippines through 11 production plants, 106 sales offices and warehouses and exclusive third party distribution network to approximately 275,000 outlets. The 12-page document allowed Pepsi Philippines to register 3.69 billion shares subject to the following conditions: the appointment of an independent director, submission of an affidavit of publication covering the updated number of shares, and the submission of final prospectus incorporating the final offer price for the IPO shares. "A pre-effective letter containing the above-mentioned conditions shall be issued to PCPPI once the registration statement is rendered effective by the commission," the SEC said. The public offering of up to 1.31 billion shares consist of 380.78 million new shares to be issued and offered by the company and up to 761.57 million secondary shares and 171.35 million optional shares for over-allotment. - RAMR/BusinessWorld