CAMPOS-LED Del Monte Pacific Ltd. has filed for its offering of $360-million preferred share sale, proceeds of which will refinance the debt it used to purchase US firm Del Monte Foods Inc.
In its regulatory filing with the Securities and Exchange Commission, the company is offering 36 million preferred shares, with a par value of $1, to be sold at an indicative price of $10 apiece.
The preferred shares will carry a dividend of between 5.25 percent and 7 percent with a step-up rate on the fifth year of the issue date, based on the 10-year US Treasury bond plus a premium. It will also have a call option that will begin on the fifth year.
The preferred shares will be listed with both stock exchanges in the Philippines and Singapore, where Del Monte is dual listed.
The company is targeting to sell its preferred shares between December 8 and 12 this year, it said.
The filing comes after Del Monte completed its Philippine public offering of 5.5 million ordinary shares for P17 per share.
The said exercise, which the company raised P125.6 million, is a requirement after the company listed by way of introduction last year.
Proceeds of the preferred share sale will be used to service the $630-million bridge financing that the company tapped to pay for the US firm Del Monte Foods, a much larger company compared with Del Monte Pacific, for $1.6 billion.
The company is confident of the prospects of its acquisition as it will give the Campos-led firm a foothold into the vast US and South American market.
Del Monte said it may now cross sell its products between the US and Asia by next year.
Del Monte Foods is expected to comprise 80 percent of Del Monte’s turnover. The first two years of its post-acquisition will be a transition year and will return to historical trends by 2016, the company said earlier. Del Monte posted a net loss of $42.8 million from January to April, partly as a result of the said acquisition, from last year’s income of $6.56 million.
Before nonrecurring items, the company generated an income of $3.8 million, it said.
“We retained a strong management team in the US who are committed to increase market opportunities and profitability for the iconic Del Monte brand,” said Joselito Campos Jr., the company’s managing director and CEO.