SEA Diner buys into Del Monte PH

Campos family-led food conglomerate Del Monte Pacific Ltd. (DMPL) has consumma­ted a deal to sell 12 percent of its Philippine business to SEA Diner Holdings Pte Ltd , a Singapore-based consumer-focused fund manager, for $120 million.

The terms of the deal—which brought the implied equity value of Del Monte Philippines Inc. (DMPI) at $1 billion—were slightly tweaked from the original agreement signed in January.

It was earlier disclosed that DMPL was selling a 13-percent stake in DMPI to SEA Diner for $130 million.

“The completion of the DMPI sale marks the beginning of a partnership with the investor, a leading investment company focused on investing in leading companies in the consumer sector in China and the Asean (Association of Southeast Asian Nations). This transaction is a testament to DMPI’s solid standing and future prospects for growth as a food company. The group looks forward to working with the investor [as a new shareholder of DMPI] in expanding the group’s footprint in the Philippines and other export markets,” DMPL said in its disclosure to the Philippine Stock Exchange on Thursday.

The sale covers 335.678 million existing ordinary shares in DMPI. The terms now include the issuance of additional new DMPI shares pursuant to a share adjustment mechanism, up to a maxi­mum cap of 1.33 percent of the total issued share capital of DMPI shares at the “relevant” time.

In relation to the share adjustment mechanism, the additional DMPI shares to be issued are now up to a maximum cap of 1.33 percent of the total issued share capital of the Philippine unit, instead of 1.44 percent as earlier set out.

After shelving the initial public offering of DMPI due to adverse market conditions in 2018, the sale of a significant minority stake through private placement seeks to enhance the value of the Philippine unit while generating funds to partially reduce debt stock.

“The net cash proceeds from the DMPI sale will be used to pay down certain outstanding loans of the company. These outstanding loans are mainly owed to Philippine banks such as Rizal Commercial Banking Corp.,” the disclosure said.

Earlier this week, DMPL likewise announced the infusion of $150 million in new equity into Del Monte Foods Holdings Ltd., the holding company of its American consumer arm Del Monte Foods Inc. This is part of the debt reduction program of the US unit.

DMPI produces and sells food and beverage products, which include fruit juices and juice drinks, packaged pineapples and mixed fruits, fresh pineapples, as well as various tomato spaghetti sauces and culinary mixes under the Del Monte brand in the Philippines. It also exports these products for sale under other brands in other countries. —DORIS DUMLAO-ABADILLA