Food kiosk king Lester Yu is rolling out a P309-million initial public offering (IPO) next month for Balai ni Fruitas Inc. in a bid to challenge the country’s iconic bakery houses.
Balai ni Fruitas, controlled by Yu’s publicly listed Fruitas Holdings Inc., is raising money to help expand its Balai Pandesal brand to 200 stores by 2026 from 23 stores as of September 2021. It also plans to build a commissary and potentially acquire more bakeries.
Balai ni Fruitas was established in 2005 and has since “become a reputable player in the Philippine food and beverage kiosk industry,” standing apart from other names in the Fruitas Group such as Sabroso Lechon and De Original Jamaican Pattie Shop and Juice Bar.
The company’s network as of September last year spanned 69 stores via brands Buko ni Fruitas, Fruitas House of Desserts and Balai Pandesal, which was acquired by Yu in June last year.
Based on its prospectus, Balai ni Fruitas will sell 325 million primary common shares at an indicative price of up to P0.75 apiece to raise P243.75 million to finance its expansion plans.
Fruitas Holdings will sell 50 million shares (P37.5 million) while an option to sell 37.5 million shares (P28.1 million) more was provided.
First Metro Investment Corp. will act as sole underwriter, issue manager and bookrunner for the IPO.
The IPO shares will be priced on March 8 while the general offer period will run from March 16-March 22. The company aims to begin trading on the Philippine Stock Exchange on March 30 this year.
Balai ni Fruitas said the “vast majority” of expansion would focus on Balai Pandesal.
This also meant the budding bakeshop would go head to head against established names such as Pan De Manila and Julie’s Bakeshop, which control over 90 percent of market by revenues, the IPO prospectus showed.
The company sees a “good opportunity” in the segment given the strong demand for bread, especially in Metro Manila, whose population consumes an average of 254 pieces of pandesal per year, according to the prospectus.
“Moreover, the consumers’ preference for bread as a substitute for rice may contribute to the growth of consumption of this category,” Balai ni Fruitas noted.
It posted a net income of P2.28 million as of September, reversing a P2.67-million loss the previous year.