Del Monte secures $100M via shares offering

Campos-led food and beverage conglomerate Del Monte Pacific Ltd. (DMPL) has raised $100 million from its second tranche of preferred shares offering.

Proceeds from this transaction are meant to pare down debt incurred following the acquisition of the US consumer business of Del Monte Foods Inc. (DMFI).

Eduardo Francisco—president of BDO Capital & Investment Corp., the sole issue manager for the offering—said the fundraising deal was closed on Friday.

Some 10 million in new preferred shares was sold to the retail market at $10 each. The dividend rate for the preferred shares is 6.5 percent a year for the five-year tenor. The dividend rate on the preferred shares will increase if DMPL does not redeem these securities on the fifth year.

“We closed at $100 million. We still have $60 million (authorized issuance of preferred shares) which we can sell next year,” Francisco said on Friday.

DMPL has gone to the local US dollar-denominated preferred shares market at the same time as electronics manufacturing firm Cirtek Holdings Philippines Corp., which raised $67 million.

This tranche is part of the shelf registration of up to 36 million perpetual, cumulative, nonvoting, nonparticipating, nonconvertible and redeemable preferred shares approved by the Securities and Exchange Commission.

Proceeds from this transaction will be used primarily for the payment of the $154 million balance of the bridge loan facility extended by BDO Unibank Inc. That bridge loan partially financed the acquisition of the US consumer business of DMFI.

For the first tranche of preferred shares offering in April, DMPL was able to raise $200 million. This became the curtain-raiser for the dollar-denominated securities platform of the Philippine Stock Exchange.