Singaporean fund invests P3.4B in Century Canning

AFP FILE PHOTO

MANILA, Philippines—Government of Singapore Investment Corp. (GIC), Singapore’s sovereign wealth fund, has invested P3.4 billion in Century Canning Corp., the holding and management company of the Po family, ahead of the stock listing of flagship Century Pacific Food Inc. (CNPF).

In a disclosure to the Philippine Stock Exchange on Friday, CNPF said GIC had agreed to extend a loan to Century Canning, with an option for the sovereign wealth fund to convert the loan into 245.5 million shares, or 11 percent of soon-to-list vehicle CNPF at P13.75 a share.

GIC has the option to convert the loan, which carries an interest of 5 percent a year, into CNPF shares within one year, but this can be extended by both parties.

If and when exercised, GIC will get an 11-percent stake in CNPF.

The strike point for conversion of P13.75 a share is at the same level as the IPO price of CNPF, which recently concluded a P3.2-billion initial public offering (IPO) and is listing all shares on the PSE on May 6.

“We are pleased to have a world-class investor such as GIC as one of our stakeholders. We look forward to a long-term, value-creating partnership with them. The financing provided by this transaction will allow us to support our various businesses, including Century Pacific Food Inc., as well as take advantage of opportunities that arise from our fast-growing economy,” Century Canning president and chief executive officer Christopher Po said in a statement.

“We are honored to have represented Century Canning in this partnership between a financial institution of the highest standing—GIC-and Century Canning, an operating company whose steady focus and constant benchmarking of its performance enable it to keep its No. 1 market share for many of its products. This mutual culture of excellence augurs well for a beneficial long-term partnership between them,” added Stephen CuUnjieng, Evercore’s chair for Asia and CCC’s exclusive financial adviser on this transaction.

The entry of GIC as a partner of Century Canning and possible shareholder of CNPF is also seen as a vote of confidence on the Philippine economy’s strong long-term fundamentals as well as the management capability of the Po family-led Century Pacific group.

Prior to this equity deal, GIC’s last major equity investment in the Philippines was a 5.6-percent stake in Ayala-led Bank of the Philippine Islands that it acquired in November last year.

The deal structure is seen as a win-win deal for both Century and GIC group, allowing Century Canning to raise funds for other non-CNPF businesses while accommodating GIC’s large minimum investment requirement without crowding out the recent IPO.

The deal gives Century Pacific leeway to sell secondary shares, which the group can use as a currency to pay for the loan after the lock-up period required by the PSE.

Century Canning was incorporated in 1978 to handle the group’s sales and distribution for canned and processed tuna, sardines and bangus (milkfish).

It is now the parent company to CNPF and the primary holding and management company of the diversified business interests of the Po family.

Proceeds from this transaction will be used by Century Canning to finance growth and expansion of existing subsidiaries including but not limited to CNPF, possible acquisitions, possible entry into new businesses, and other general corporate purposes, based on the disclosure.

Originally posted: 3:46 pm | Friday, May 2nd, 2014