Leading food and beverage kiosk operator Fruitas Holdings Inc. seeks to future-proof its business by reallocating part of its initial public offering (IPO) proceeds to invest in real estate assets deemed vital to its operations.
In a disclosure to the Philippine Stock Exchange on Monday, Fruitas said its board had approved the reallocation of IPO funds to cover the acquisition of the site of its buko water commissary and its new headquarters.
Based on the disclosure, P145 million has been reallocated for the acquisition of the site of its new headquarters, measuring more than 900 square meters with a five-storey building and net floor area of more than 2,000 square meters, located in Sta. Mesa, Manila.
An additional P20 million has been allocated towards commissary expansion to cover the acquisition of the 1,328 square meter site of the buko water commissary in Quezon City, which is currently being leased.
Final terms of the acquisition of these properties will be subject to negotiation, the disclosure said. Agreements are expected to be executed not earlier than mid-October.
The objective of these property acquisitions is to “secure ownership, and therefore the long-term use, of assets which are vital for the future operations of the group.”
“Given the current low-yield environment, Fruitas is also investing its excess liquidity in assets which can provide higher returns, including potential capital appreciation in the long run. The move will result in savings on lease expenses for the buko water commissary,” the company said.
“Certain back-office operations will also be consolidated in the new headquarters and rental income will be generated from tenants of potential excess space,” it added.
Fruitas raised over P1 billion from its stock market debut last year. It is now valued by the stock market at around P2.58 billion.