THE PHILIPPINE Stock Exchange (PSE) has approved the plan of Del Monte Pacific Ltd. (DMPL) to raise as much as $180 million from a stock rights offering to be launched in the Philippines and Singapore.
The offering by the food conglomerate of the Campos family is part of DMPL’s plan to pare down debt related to its $1.675-billion acquisition of the consumer food business of American corporation Del Monte Foods (DMFI).
The deal allowed DMPL to break into the American market and reunite with its mother brand in the United States.
DMPL plans to offer one rights share for every 2.029 ordinary shares held.
The offering will run from Feb. 5 to 23 this year, with BPI Capital Corp. and DBS Bank Ltd. acting as lead underwriters.
A total of 642.8 million common shares will be offered by DMPL through the two bourses, where it is dually listed.
Based on an offering memorandum posted on the PSE, the offering will be priced at a discount within the range of 20 to 25 percent to a reference price which will be calculated based on volume-weighted average price of an ordinary share of DMPL for trades on the PSE and the Singapore Exchange Securities Trading Ltd. (SGX-ST) lasting five market days prior to and including the pricing date.
The targeted pricing date is Jan. 23. The offering is also subject to the approval of SGX-ST. The cponglomerate already secured a clearance from the Securities and Exchange Commission.
DMPL intends to utilize the net proceeds of the rights issue to repay the bridge loan facility of $165 million from the Bank of Philippines Islands.
The loan was obtained to partially finance last year’s acquisition of DMFI, the US consumer food business.