Del Monte PHL’s IPO gets PSE go-ahead

By Arra B. Francia, Reporter
THE Philippine Stock Exchange has given the greenlight for the P17.5-billion initial public offering (IPO) of Del Monte Philippines, Inc. (DMPI) on Thursday.
In a term sheet posted yesterday, the PSE said it has approved DMPI’s issuance of up to 587.44 million common shares priced at up to P29.88 each.
The company is set to have a public float of 21% and a market capitalization of up to P83.58 billion after the fund raising activity.
DMPI will set the price for the issue on June 6, with the offer period to run from June 8 to 18. The company looks to lists its shares on the main index of the PSE by June 25.
This will place DMPI ahead of D.M. Wenceslao & Associates, Inc., which will be offering its shares from June 18 to 22, with target listing slated for June 29.
Analysts noted that investors’ appetite for the issuance will depend on its pricing, given that it has been a while since a new issue was offered in the market.
“It’s good and stable company. I think it’s quite long since last IPO. So I think investors are looking for market opportunities, and if priced right, it could be a few times oversubscribed. However we will value it when the data and briefing comes,” IB Gimenez Securities Research Head Joylin F. Telagen said via text.
First Grade Finance, Inc. President and Managing Director Astro C. Del Castillo noted the same, saying the price will determine the issue’s performance despite the volatility in the market.
“As long as the price is right, more attractive, despite the slump in prices. Yun ang risk, if the price is at a discount to valuation, people will flock to the issue,” Mr. Del Castillo said via phone.
Meanwhile, Eagle Equities, Inc. Research Head Christopher John Mangun said the stock’s performance may depend on its issue manager.
DMPI engaged BDO Capital and Investment Corp. as issue manager, sole global coordinator, and sole book runner.
“The IPO has been delayed several times. I think they have enough exposure to get all the shares sold. Plus BDO is the underwriter. And they have one of the best structures in place to sell all these shares,” Mr. Mangun said in a separate message.
Net proceeds raised from the issuance will be used by DMPI’s parent company, Del Monte Pacific Ltd. (DMPL), to partially prepay or repay certain loan facility or facilities of around P6.8 billion. Around P3.544 billion will be used to repay certain payables, while it will also allocate up to P6 billion to refinance or reacquire certain financial obligations of the DMPL group to reduce its leverage positions.
DMPI is an indirect subsidiary of DMPL through Del Monte Pacific Resources Ltd.’s Central American Resources, Inc.