DMPI still keen on holding IPO

MANILA, Philippines — Campos family-owned Del Monte Philippines Inc. (DMPI) has not abandoned its planned initial public offering, which was initially slated two years ago, on June 27, 2018.

During the annual shareholders meeting last week, Del Monte Pacific Ltd. said DMPI would consider launching the IPO “when market conditions are favorable.”

The Philippine arm of DMPL deferred the IPO two years ago amid the market volatility then.

The company had already obtained the necessary approvals, but DMPL, the parent firm, said DMPI has decided to defer the IPO because of prevailing market conditions.

“Market conditions continue to be volatile and the company has been advised by its bankers and advisors that it would be in the best interest of the company and DMPI to defer the offering until such time when market conditions improve,” DMPL said at the time.

According to the plan, the IPO will raise as much as P17.552 billion in net proceeds through the sale of 587.437 million secondary shares at a price of up to P29.88 per share. After the offer, the company will have a public float of 21 percent.

Moving forward, the Del Monte Group is actively working on improving its profitability and generating higher cash flows in the years to come through higher sales and cost savings from the plant closures in the USA, along with other cost saving measures.

“Moreover, we are benefiting from the COVID environment as consumers turn to trusted brands, shelf-stable and culinary products for home cooking. With higher cash flows, the group will be able to lower its debt levels. In addition to lower debt from higher cash profits, as we are expecting to be profitable going forward, we expect the retained earnings and equity to continue increasing that will also help in reducing the net debt to equity ratio,” DMPL said last week.

The company is one of the country’s major food players, selling canned fruit and juice drinks, tropical fruit, sauces and other condiments.

It buys and sells products to and from afflicted companies such as GTL, S&W Fine Foods and Del Monte Food Inc. (DMFI).

GTL is engaged in the business of trading food products under the Del Monte brand.

S&W Fine Foods, meanwhile, is in charge of the sale and distribution of food products under the S&W brand.

DMFI’s businesses, on the other hand, comprise a portfolio of consumer brands in numerous foods categories, including major packaged fruit and vegetable categories.

DMPI is a wholly owned subsidiary of DMPL, which is listed on the Philippine Stock Exchange and Singapore Exchange Ltd.