THE Campos-led Del Monte Pacific Ltd., dual-listed in both stock exchanges in the Philippines and Singapore, on Friday set a deep discount on the price of its rights issuance that pulled down the total proceeds.
The company said the final offer price of its rights shares was placed at P10.60 per share for the Philippine transaction and S$0.325 for the Singapore rights offer.
Del Monte gave a 37-percent discount with its closing price of P16.90 per share at the Philippine Stock Exchange, while it gave a 31-percent discount for its Singapore transaction. Del Monte’s shares at SGX closed at S$0.475.
The company has applied for the additional listing of up to 641.93 million shares for the rights shares. At these prices, Del Monte said that it will raise about $154.4 million in proceeds, or about P6.8 billion. The figure fell short of the $180 million that it earlier said it will raise from the rights offer.
“The company intends to utilize the net proceeds of the rights issue to repay the bridging facility of $165 million from the Bank of Philippine Islands that the company had obtained to partially finance the acquisition of the consumer food business which was completed on February 19, 2014. The rights issue will allow the company to de-leverage and strengthen its balance sheet,” Del Monte said earlier.
A rights issuance gives current shareholders to purchase additional shares from the company in proportion to their existing holdings, within a fixed time period.
At the moment, NutriAsia Pacific Ltd. holds some 66.76 percent of Del Monte, or an aggregate interest of 869.31 million shares, Lee Foundation owns some 7.71 percent and Lee Pineapple Co. Ltd. owns 8.21 percent.
NutriAsia has signified that it will subscribe for its pro-rata entitlements for the rights issue.
Del Monte earlier said that it turned in a profit of a mere $200,000 for its fiscal second quarter ending October from last year’s $8.9 million in income, mostly as a result of its huge acquisition cost of US firm Del Monte Foods.
Revenues ballooned to $548 million, some 80 percent of which already came in from the US firm, from last year’s $136.3 million.
Stripping out the income of US-based Del Monte Foods, its revenues for the period would have been only at $128.5 million, or less than the previous year, while net profit would have been at $10.4 million.
The America now consists 80 percent of Del Monte’s turnover, followed by 19 percent from Asia Pacific and only 1 percent from Europe after the lower sales of pineapple juice concentrate due to the intentional shifting out of unbranded juice.