SEC approves Del Monte Philippines’ P17.55-B shares offering

The Securities and Exchange Commission has approved a plan of food producer Del Monte Philippines Inc. (DMPI) to sell as much as P17.55 billion secondary common shares to the public.

This initial public offering consists of 587.437 million secondary shares which will be offered at as much as P29.88 per share.

The offering will bring 21 percent of DMPI’s shares to public hands.

DMPI is a market leader in the Philippines, with market shares ranging from 41 percent to 85 percent in categories such as canned pineapple and mixed fruit, canned and tetra ready-to-drink juices, tomato sauce and spaghetti sauce.

The company will not directly receive any net proceed from the offering but the seller of the shares—parent company Del Monte Pacific Ltd. (DMPL)—intends to use the proceeds to reduce debt stock and strengthen its balance sheet.

“The offer would result in tangible benefits to DMPL shareholders that are substantial, quantifiable and clearly achievable,” DMPI said in its prospectus filed in the SEC on May 24.

DMPI accounts for 25 percent of DMPL’s sales revenue although in terms of cash flow, its share is much bigger at 61 percent. The Philippine unit also contributes more to group-wide net income mainly because of DMPL’s leveraged buyout of DMFI in 2014.

In 2014, DMPL acquired the US consumer food business of Del Monte Foods Inc. (DMFI) for $1.675 billion. —DORIS DUMLAO-ABADILLA