Del Monte eyes overseas offering to raise $360M
MANILA, Philippines–Conglomerate Del Monte Pacific Ltd. (DMPL) plans to raise up to $360 million from an overseas offering of US dollar-denominated preferred shares to fund its leveraged buyout of the consumer food business of US firm Del Monte Foods.
In a disclosure to the Philippine Stock Exchange on Friday, DMPL said DBS Bank Ltd. would be the sole global coordinator of the offering.
The company intends to list the “preference” shares on the Singapore Exchange Securities Trading Ltd. (SGX- ST) and has already submitted an application to the bourse, the disclosure said.
The offering is subject to market conditions.
“The expected proceeds of the offering will be used to refinance the company’s acquisition of the consumer food business of Del Monte Corp. earlier this year,” the disclosure said.
DMPL, the food company of the Campos family, is listed on the PSE and SGX. It intends to pursue its international offering in lieu of the previously disclosed Philippine offering, citing “timing and market considerations.”
Preferred or preference shares are shares of stocks whose holders are given preference when it comes to dividend payment over common stockholders.
Fixed dividends are usually paid, but its holders may not have voting rights.
This offering is part of a series of fund-raising activities lined up by DMPL to cut its debt stock arising from its big US acquisition.
Earlier this year, DMPL completed the $1.675-billion buyout of the consumer food business of Del Monte Foods, gaining a foothold in the world’s biggest market. The transaction allowed DMPL to consolidate its portfolio with the US mother brand. The US consumer food business has since been renamed Del Monte Foods Inc. (DMFI).
DMFI, with a 26-percent share in the canned fruit market of the United States, is expected to provide DMPL with a solid growth platform and supplement its expansion efforts, providing longer-term opportunities in the emerging markets of South America.
With this transaction, DMPL quadrupled its sales from $500 million to more than $2 billion and fortified its aspiration of becoming a global branded food and beverage company.
DMPL operates one of the largest pineapple plantations in the world, where DMFI may reap potential benefits from economies of scale, allowing it to optimize its operations over time.
DMPL owns the Del Monte brand in the Philippines where it is the market leader across major food and beverage categories.
Also, the brand has a growing presence in India through FieldFresh Foods, DMPL’s joint venture with Bharti Enterprises, one of India’s largest conglomerates.
In 2007, DMPL purchased the S&W brand—producer and marketer of premium-quality packaged fruits and vegetables—from Del Monte Corp. for Asia, Middle East, Europe and Africa.
This acquisition has added significant scale and reach into new market segments for DMPL—a longtime supplier of processed pineapple products to the United States.
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