FRUITAS Holdings, Inc. is buying new properties for a buko water commissary and a new head office by reallocating funds generated from its initial public offering (IPO) last year.

The company told the exchange on Monday its board of directors had approved the repurposing of some P165 million from the company’s P820-million IPO proceeds. The budget was originally intended for store network expansion.

Some P20 million will be directed to commissary expansion, increasing the project’s fund to P60 million from P40 million. Fruitas will use a portion to buy the land on which its Quezon City buko water commissary stands, equivalent to two lots totaling 1,328 square meters.

The remaining P145 million will be used to buy a new head office in Sta. Mesa, Manila. The company is eyeing a 909.5-square meter lot with a five-storey building and a net floor area of at least 2,000 square meters.

The budget will cover minor improvements on the site. Fruitas intends to lease some excess space to tenants, as the location of the headquarters is a commercial area.

The plans are still subject to negotiation, but the company expects to seal the deal after mid-October.

Fruitas said these purchases are meant to secure ownership in assets that the company needs for operations. Buying the property where its buko water commissary operates will save it from lease expenses, and moving to a new head office will consolidate back-office operations and generate rental income from tenants.

“In the long-run, we also expect that these assets will have capital appreciation,” it said.

With the adjustments, Fruitas has reduced its budget for store network expansion to P305 million from P470 million. Some P135 million remains allocated for acquisition opportunities and introduction of new concepts, and P175 million for debt repayment.

Meanwhile, the company said its board of directors approved the infusion of P16 million capital into its wholly owned subsidiary Fruitasgroup, Inc. It will buy 40,000 common shares in the subsidiary at P400 each.

The fund is part of the company’s P305-million budget for store network expansion, where it intends to use P147 million for investments in subsidiaries through new equity or advances.

Fruitas operates food and beverage kiosks under brands such as Fruitas Fresh from Babot’s Farm, Buko Loco, De Original Jamaican Pattie, Black Pearl, and Sabroso Lechon.

It has 1,068 stores as of end-2019, where more than 600 have resumed operations since quarantine measures have started easing. Fruitas temporarily closed its stores during the height of the lockdowns that the government ordered to contain the coronavirus outbreak.

The disruption resulted in a P12.35-million net loss for the company in the first semester, a turnaround of its P51.97-million net income last year.

Shares in Fruitas at the stock exchange picked up five centavos or 4.13% to close at P1.26 each on Monday. — Denise A. Valdez

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