SUMMARY
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MANILA, Philippines – The Securities and Exchange Commission (SEC) approved en banc on Thursday, November 20, the P4.6 billion ($102.21 million)* follow on offering of Max’s Group Inc.
As of end-June 2014, the restaurant chain operates 525 stores across 11 brands: Dencio’s, Le Coeur de France, Maple, Max’s Restaurant, Pancake House, Sizzlin’ Steak, Teriyaki Boy, and Yellow Cab. It also operates in the country international food brands like Jamba Juice, Krispy Kreme, and The Chicken Rice Shop.
Based on documents filed with the SEC, Max’s Group will sell up to 300.136 million common shares, of which 31.1 million are new common shares; 204.63 million shares are to be sold by wholly-owned subsidiaries of the company; and 61.39 million are secondary shares to be sold by certain shareholders of the company.
The company already lowered the maximum offer price for the share sale to P21.75 ($0.48) apiece from P29.5 ($0.65) per share.
Max’s Group tapped BPI Capital Corporation to be the lead issue manager and lead underwriter for the offering, while BDO Capital & Investment Corporation is the senior co-lead underwriter.
About P3 billion ($66.62 million) of the net proceeds from the offering will be used to repay the P3 billion ($66.62 million) long-term debt incurred by the company from Bank of the Philippine Islands when it partially financed the acquisition of Pancake House Inc.
The remaining proceeds will be used to finance capital expenditures for store and commissary expansion and working capital requirements.
The restaurant chain operator has about 324 outlets located in Metro Manila; 117 outlets in Northern and Southern Luzon; 29 outlets in the Visayas; and 28 outlets in Mindanao.
It also has 27 outlets the US, Canada, Middle East, and Malaysia.
Max’s Group’s store count is expected to reach 630 to 640 outlets by end-2014.
In July, Pancake House announced it was acquiring 20 firms under the Max’s Group of Companies through a share-swap deal worth P4.05 billion ($89.89 million), creating the country’s largest casual dining restaurant chain.
Max’s Group is implementing a comprehensive restructuring program to rationalize its portfolio of brands and streamline operations. Pancake House Group is a member of the Max’s Group.
At present, 15 to 20 of the Pancake House Group’s 301 stores are underperforming and are being evaluated for either right-sizing, conversion to franchise, or closure.
Max’s Group estimated this exercise would save the company some P35 million ($777,323.07), allowing options for redeployment of capital and other resources towards other businesses where returns are maximized. – Rappler.com
*$1 = P45.03
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