Del Monte Pacific borrows $515M from BDO, BPI to fund Del Monte Foods acquisition

Fruit grower and canner Del Monte Pacific Limited is borrowing over half a billion dollars from two Philippine banks to finance its $1.675 billion acquisition of the consumer food business of US-based Del Monte Foods.

 

In a disclosure to the Philippine Stock Exchange Wednesday, Del Monte Pacific said it entered into a $350 million bridge loan facility agreement with BDO Unibank Inc. and a $165 million term loan deal with Bank of the Philippine Islands (BPI).

 

In the BPI facility, NutriAsia Pacific Ltd. – the controlling shareholder of Del Monte Pacific – guaranteed the loan. 

 

Del Monte Pacific said it is in talks with strategic investors for an equity investment of $74.5 million in the company. Earlier, it said it intends to fund part of the acquisition through a share placement of $150 million.

 

The company said it will raise the remaining $75.5 million through share placement, a medium term loan or a combination of both.

 

Last October, Del Monte Pacific announced it entered into a definitive agreement to buy Del Monte Foods through a new subsidiary.

 

It targets to close the transaction not later than the first quarter of 2014, pending regulatory approvals and customary closing conditions.

"We are complete with the funding and the transaction should be closing by around mid-February," COO Luis F. Alejandro told GMA News Online in a text message.

 

The acquisition paves the way for Del Monte Pacific to expand in the US through the significant scale and reach of Del Monte Foods. – Danessa Rivera/VS, GMA News