Del Monte eyeing to raise ₱44-B in second IPO attempt

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Metro Manila (CNN Philippines, April 29) — Del Monte Philippines Inc. is giving another try to its initial public offering, which could raise the firm up to ₱44 billion, its parent company confirmed.

Del Monte Pacific Limited announced to the local bourse on Thursday that its local subsidiary has filed a registration statement to the Securities and Exchange Commission on its proposed IPO.

The food and beverage company hopes to sell 699.33 million secondary shares along with an over-allotment option of up to 104.9 million shares, its preliminary prospectus revealed. The shares will be sold up to ₱54.80 apiece.

DMPI initially geared up for an IPO in 2018 but shelved its plans at the time, attributing the move to then-volatile market conditions.

“The planned IPO of Del Monte Philippines, Inc. is a moment of pride for the Board and the DMPI management team. It represents the realization of an ambition we have set – to provide the people of the Philippines with the opportunity to share in the continued growth and success of our Asia business,” said Joselito Campos Jr., DMPI president and chief executive officer.

The company takes pride in its 95-year history, which led to it and the Del Monte brand becoming household names in the Philippines. Citing data from research firm Nielsen, DMPI reported market shares of 88% in packaged pineapple, 87% in tomato sauce, 74% in packaged mixed fruit, and 39% in spaghetti sauce.

DPMI likewise said it is the largest exporter of fresh pineapples to China, and among the three biggest exporters of the said fruits to Japan, South Korea and the Middle East, citing GlobalData.

“Our company has demonstrated resilience during the last 12 months, growing our operations and efficiency in a challenging year. This gives us the confidence to embark on the next phase of our journey. We firmly believe that this will better position us to take full advantage of our market leading position and to further accelerate our strategy across the region,” he further said.

DMPI reported a ₱3.47 billion net income for its fiscal year 2020, which runs from May 2019 to April last year, corresponding to a 10.9% net profit margin.

The DMPL, which holds 87% ownership of the company, will use net proceeds from the offer to partially repay certain facilities extended to it and redeem its Series A-1 Preference Shares, the SEC said in a statement on Wednesday,

The said proceeds will also be used by Central American Resources Inc. (CARI), which owns 13% of DMPI, to “cover its share in the offer-related costs in respect of the shares being offered,” the SEC added.

Meanwhile, a stock analyst notes DPMI’s attempt at a public offering this time around is really an issue of timing.

“With the vaccine rollout ramping up, many investors will be watching when the country will make a recovery. Should Del Monte get this right, they might be able to ride the momentum during both the recovery and election thesis,” Regina Capital managing director Luis Limlingan told CNN Philippines.

DPMI’s IPO could become the second largest maiden offering in the country next to food manufacturer Monde Nissin’s, which hopes to raise ₱63 billion.