RFM defers equity fund raising plan

MANILA, Philippines - The Concepcion-Araneta owned conglomerate RFM Corp. approved Wednesday the deferment of its proposed equity fund raising effect due to negative market conditions.

The company was earlier looking to raise P800 million to P1 bilion through a private placement or follow-on offering of shares to fund its expansion program.

The plan was to offer not more than 450 million new shares through a two-stage process to be handled by financial advisor ATR Kim Eng Capital Partners Inc.

The fund-raising program comprises offer and sale by existing shareholders and the subscription by selling sharehoders of the same number of shares to be sold in the private placement tranche.

The transaction when completed would boost the company’s public float to 25-30 percent from the existing 20 percent.

The company is aiming to double the capacity of its pasta plant and expand its bun production line by 50 percent.

RFM is eyeing a 20-percent growth in net profit this year as sales are seen to hit over P10 billion. In 2010, the company reported a 71-percent jump in net earnings to P625 million.

Net sales rose six percent to P8.8 billion, primarily due to the steady robust growth of core products and enhanced by a continuing stream of product innovations in their branded businesses, backed by aggressive marketing campaigns, especially in Fiesta pasta, and Selecta milk.