THE CAMPOS family has tapped a $100-million term loan from Ayala-led Bank of the Philippine Islands to subscribe to the stock rights offering of food conglomerate Del Monte Pacific Ltd. (DMPL).
The loan will be secured by the family’s shares in DMPL with a collateral value of not less than 200 percent of the loan amount and dividends accruing from the shares equivalent to an agreed percentage of the loan amount, according to a disclosure to the Philippine Stock Exchange yesterday.
NutriAsia would be required to provide additional security as necessary to maintain the 200-percent collateral value, the disclosure said.
The share cover would constitute about 849.99 million or 65.28 percent of DMPL’s issued share capital before the rights issue and about 43.72 percent of the food company’s enlarged share capital after the rights issue, the disclosure said.
DMPL is raising as much as $180 million from a stock rights offering to be launched in the Philippines and Singapore. The offering is part of DMPL’s plans to pare down debt related to its $1.68-billion acquisition of the consumer food business of American corporation Del Monte Foods Inc. (DMFI). The leveraged buyout allowed DMPL to break into the American market and reunite with its mother brand in the United States.
The company is offering 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.
DMPL intends to use net proceeds of the rights issue to repay the bridge loan facility of $165 million also from the BPI. The loan was obtained to partially finance last year’s acquisition of DMFI.
DMFI, with a 26 percent market share in the canned fruit market in the United States, is envisioned to provide the group with a solid growth platform and supplement its expansion efforts and provide longer term opportunities in the emerging markets of South America.
For its part, DMPL operates one of the largest pineapple plantations in the world and is seen bringing to DMFI potential benefits from economies of scale, value-added expansion as well as the optimization of its operations over time. It owns the Del Monte brand in the Philippines where it is the market leader across major food and beverage categories. Doris C. Dumlao