THE company that makes Century Tuna on Tuesday said it reallocated some P439 million of the proceeds of its initial public offering (IPO) to fund the construction of its new storage facilities in General Santos City.
Century Pacific Food Inc. said the storage facilities will operate by the first quarter of next year.
The said funds were supposed to fund the construction of a tin-can factory in General Santos, and the completion of a new dairy and mixes plant in Taguig.
“The factories were partially funded by operating cash, prior to the IPO, in order to fast-track their completion,” the company said. “Both plants are now currently fully operational. The tin-can factory in General Santos also completed within its expected budget,” it added.
Century Pacific, majority-owned by the Po family, raised a total of P3.15 billion during its IPO last year. It was supposed to spend some P458 million for the tin-can factory and some P132 million for the dairy factory, while none was allocated for the storage facilities.
The company also obtained additional funds after Government of Singapore Investment Corp. (GIC), a sovereign wealth fund, invested in Century Canning Corp.—the parent firm of Century Pacific, which also manufactures corned beef under the Argentina brand.
Century Canning has entered into an exchangeable loan agreement with GIC’s affiliate Arran Investment Private Ltd. for a P3.37-billion loan which carries a 5-percent interest rate per annum.
The company said proceeds of the loan will be used to finance growth and expansion of existing subsidiaries, possible acquisitions, entry into new businesses and other general corporate purposes.
The exchangeable loan, will mature by May, is extendable by both parties. Arran may decide if the loan may be repaid through a conversion of principal and all accrued interest into 245.5 million issued and outstanding shares of Century Pacific, the publicly listed company.
“Should the exchange option be exercised, GIC will own approximately 11 percent of Century Pacific’s issued and outstanding shares,” Century Canning said.
“Conversion shares will be transferred from existing shares owned by [Century Canning] and will not cause dilution to [Century Pacific’s] public investors,” it added.
For the nine months of 2014, the company reported a P1.2-billion net income, some P509.5 million of which came in the third quarter.
“Strong demand from both the domestic and export market, together with sustained margins from the canned-tuna and canned- meat business segments, contributed to the company’s income performance this quarter,” the company said.