Del Monte completes fund-raising

Campos-led food and beverage conglomerate Del Monte Pacific Ltd. (DMPL) has completed a $200-million fund-raising from a pioneering offering of preferred shares that also became the curtain-raiser for the dollar-denominated securities platform of the Philippine Stock Exchange.

In a disclosure to the PSE on Friday, DMPL announced that its offering of US dollar-denominated preferred shares, which ended last week, had been “33 1/3 percent oversubscribed.”

A total volume of 20 million preferred shares were sold at the offer price of $10 per share, the disclosure said.

Dividend rate for the preferred shares is 6.625 percent a year.
The preferred shares were sold and underwritten for up to $150 million by the joint lead underwriters—BDO Capital and Investment Corp., China Bank Capital Corp., PNB Capital and Investment Corp. and RCBC Capital Corp.

“The success of Del Monte perpetual preferred issue, the first dollar-denominated instrument of the PSE, can be attributed to the track record and iconic brand of Del Monte, together with support from the PSE, BSP (Bangko Sentral ng Pilipinas) and SEC (Securities and Exchange Commission),” said Eduardo Francisco, president of BDO Capital which also acted as sole issue manager.

In a text message, Francisco said demand for the offering was mainly domestic. “We didn’t sell overseas,” he said.

DMPL’s preferred shares will be issued and listed on the PSE on April 7. They will be traded on the PSE under the symbol “DMPA1.”

In 2014, DMPL made the bold move of acquiring the consumer food business of privately held American corporation Del Monte Foods (DMFI) for $1.675 billion, thereby breaking into the US market and reuniting with its US mother brand.
The deal included DMFI’s leading US canned fruit, vegetable and broth business under American brands Del Monte, Contadina, S&W and College Inn. This transformed DMPL into a multinational corporation with sales breaching $2 billion.

Because it bought a company much bigger than itself—DMPL entered a consolidation phase after the takeover. The issuance of preferred shares was primarily meant to reduce the debt incurred following the acquisition of DMFI.

In February, DMPL extended its $350-million facility agreement with BDO Unibank Inc. for two years. DMPL intended to refinance the BDO loan using proceeds from these preferred shares.

DMPL expects to issue up to $360 million of these preferred shares within three years, a move seen to improve its debt metrics.—DORIS DUMLAO-ABADILLA