Del Monte Pacific selling $160 M preferred shares

MANILA, Philippines — Del Monte Pacific Ltd (DMPL), listed in both the Singapore and Philippine stock exchanges, is raising $160 million from a second tranche of its dollar-denominated shares.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, DMPL said the balance consists of up to 16 million Series A preferred shares at $10 per share.

DMPL is seeking regulatory approval for the second tranche of the offer.

BDO Capital & Investment Corp. has been appointed as the sole issue manager for the offering.

Proceeds of the offer will be primarily used for the payment of the $154 million balance of the bridge loan facility extended by BDO Unibank Inc. to the company, which partially financed the acquisition of the consumer food business of Del Monte Foods Inc.

According to the timetable, the target pricing date is on Nov. 27 and the offer period is from Nov. 27 to Dec. 8.

The listing date is set on Dec. 15.

Last year, DMPL issued the maiden dollar denominated securities in the local stock market.

DMPL issued an initial tranche of 25 million preferred shares comprised of 15 million shares for the base offer and an oversubscription option of 10 million at $10 per share.

The initial tranche is part of a shelf registration of DMPL’s debt program of up to $360 million or 36 million shares.

DMPL is the first company to issue dollar-denominated securities (DDS), which the Securities and Exchange Commission (SEC) had earlier approved.

The introduction of DDS aims to provide issuers the flexibility to meet their capitalization requirements. It also offers an alternative instrument for investors with US dollar deposit accounts. In the same manner, the product can also attract offshore investors and reduce their currency risk exposure..

The  rules, approved by the PSE, provide the framework and guidelines for the listing, trading and clearing and settlement of securities that will be issued in dollar denomination.

According to the DDS rules, PSE listed companies may issue a new set of securities, either common or preferred shares, which are quoted, traded, and settled in US dollars. 

This will provide listed companies the venue to raise new capital in US dollars to meet their dollar needs.  It also gives investors with dollar holdings an investment vehicle that could provide viable returns, according to the PSE.