Puregold may upsize notes offer

MANILA, Philippines - Lucio Co-led grocery chain operator Puregold Price Club Inc. said it may upsize its planned corporate notes issue to P8 billion, depending on market demand.

During the lender’s briefing on its notes issue yesterday, Puregold officials said they have set aside up to P3 billion worth of fixed-rate corporate notes in case of strong demand for the issue. This is on top of the maximum P5 billion worth of notes it originally planned to issue.

The notes will have a maturity of five years and seven years. Pricing of the notes has been set on Oct. 19.

Proceeds from the issue will be used to fund Puregold’s aggressive expansion program and planned acquisitions.

The company has tapped First Metro Investment Corp. as lead underwriter and arranger for the issue.

Puregold, the country’s second largest supermarket operator, is seeking to double its store network by 2015 as it expands into the Visayas and Mindanao. As of end-June this year, the group had a total of 134 outlets, 109 of which are Puregold, six S&R Membership Shopping Club and 19 Parco supermarkets.

 Riding on the crest of strong consumer spending, the company is increasing the number of stores it will open this year to 31 from the original plan of 25.

To further widen its presence in the country and attract a larger clientele, Puregold is on the lookout for new acquisitions.

The company has acquired 100 percent of S&R Membership Club through a P16.5 billion share swap deal, allowing the Co family to consolidate all retailing businesses under a single publicly-listed corporation targeting all market segments.

Puregold caters to the lower-income with a market share of 16 percent while S&R, which caters to the middle and upper class consumers, has a market share of 3.3 percent.

The group acquired the Parco supermarket chain in a deal valued at around P760 million to serve the mass market. Of its 19 stores, 12 are located in Manila, three in Bulacan and four in Rizal.

Puregold expects to grow total sales by 50 percent this year from P39 billion in 2011 on the back of new store openings.