Fruitas Holdings, Inc. (Fruitas) is postponing plans to expand its foodpark business to invest P25 million from its initial public offering (IPO) proceeds in debt repayment.

In a stock exchange disclosure Monday, the food and beverage kiosk operator said its board of directors approved tweaking the previously announced allocation of its P820 million proceeds from last year’s public offer.

The P150-million allocation for debt repayment, which was already disbursed in 2019, will be increased to P175 million as it takes the budget originally allocated for foodpark expansion.

“Since there is no immediate funding requirement for its foodpark business, the company’s board decided to re-allocate the funds to further reduce the debt level of the group, which will also reduce its interest expense,” it said.

Allocations for other projects will remain as is: P470 million for store network expansion and improvement, P40 million for commissary expansion, and P135 million for acquisitions and introduction of new concepts.

Specifically, P147 million of the P470 million budget for store network expansion will be disbursed to Fruitas subsidiaries through new equity or advances this year. “While the subsidiaries await full deployment of the funds, this will be used by the subsidiaries as working capital,” it said.

The P40-million budget for commissary expansion will be used to upgrade Negril Trading commissaries, the buko water commissary in Quezon City and a Cebu commissary within the year. Fruitas also previously said it bought a property in Sasa, Davao City to be used as office and warehouse.

The P135-million budget for acquisitions and introduction of new concepts will be disbursed from 2020 to 2021. Fruitas has so far completed four acquisitions since its IPO in November.

The company earlier said it was setting aside P270 million for capital expenditures this year. “Fruitas is cognizant of potential changes in the market and may update and/or re-allocate its 2020 capex budget accordingly,” it told the stock exchange on May 29.

“The store network expansion and store improvement program for 2020 will cover establishment of new stores, and improvement of existing stores, including expansion or conversion of some stores into potential CocoDelivery hubs. This also includes an allotment for the purchase of delivery vehicles to support the expanded network and reach our customers more efficiently,” the company added.

Shares in Fruitas at the stock exchange ended flat on Monday at P1.25 apiece. — Denise A. Valdez