Del Monte Pacific issues US-dollar shares

MANILA, Philippines – Publicly listed Del Monte Pacific, Ltd (DMPL) has debuted its dollar-denominated securities at the Philippine Stock Exchange through a preference share offering.

At an investor roadshow held at the Shangri-La Makati last Wednesday, Del Monte said that it will use the net proceeds of the offer to partially refinance a $350 million loan facility from BDO Unibank.

DMPL targets to issue 15 million shares priced at $10 per unit, with an oversubscription option of up to 10 million shares. The public offer period is from March 22 to 28, and the listing date is April 7. 

This is also PSE’s first product offering for investors with US dollar accounts.

The move is part of DMPL’s deleveraging plan and is executed in conjunction with a group-wide strategic plan that was mapped out with a global strategy firm.

Ed Francisco, President of BDO Capital & Investment, said that this is attractive investment opportunity, especially for individual market players.

DMPL’s offer has a lower minimum investment requirement of 100 shares or $1,000, compared to the usual preferred share price of $200,000 for US-dollar investments. The dividend rate is 6.625% per annum, payable every April and October. 

Preferred shares are treated as equity and dividends from these shares are paid out before common equity dividends.

Eyeing global growth

In 2014, DMPL acquired its US counterpart, Del Monte Foods, for $1.7 billion. The acquisition brought in US brands S&W and Contadina into the Group’s portfolio. This could have been the first buyout of a foreign company by a local brand at the time, according to Mr. Ed Francisco. 

DMPL returned to profitability in 2016. High sales in Asia boosted the Group’s growth while restructuring and optimization on their US plants streamlined DMFI’s operations. 

DMPL Chief Financial Officer Parag Sachdeva said that the Group expects to generate a profit in 2017, which should make investors confident about availing of the public offer.

“We would be really focusing on consumer trends and strengthening the core investing and innovation, as well as digital strategy across the globe,” he said. – Rappler.com