Del Monte Pacific Ltd. has successfully raised $100 million from the sale of dollar-denominated preferred shares, the underwriter handling the transaction said Friday.
BDO Capital and Investments Corp. president Eduardo Francisco said in an interview Del Monte raised $100 million at the end of the offering period Friday. The sale represents second tranche of the issue.
“We are happy that we were able to raise $100 million from the offering which was widely distributed,” Francisco said.
He said the company might issue the balance of $60 million worth of preferred shares next year.
The shares offering, which offered a dividend rate of 6.5 percent a year, coincided with another dollar-denominated preferred offering of Cirtek Holdings Philippines Corp., which generated $67 million out of the $140 million it planned to raise.
Del Monte’s preferred shares offered a step-up feature in which the dividend rate will be adjusted to the sum of the 10-year US Treasury Bond rate plus an initial spread plus margin of 2.5 percent per annum for those not redeemed by the company on the fifth year,
There is no adjustment on the dividend rate, however, if it is higher than the applicable step-up rate. The preferred shares will be listed with the Philippine Stock Exchange on Dec. 15.
Del Monte last week raid it swung back to a net loss in the three months ending October 2017 due to lower sales recorded by its unit in the United States.
Del Monte posted a net loss of $2.8 million from a net profit of $19.97 million in the same period last year.
Sales during the period a stood at $624.7 million, down 1.8 percent on year, due to lower revenues in the United States as a result of unfavorable pricing in food service, and higher planned trade promotion spending.
The group’s US subsidiary, Del Monte Foods Inc., which accounted for 78 percent of total sales, contributed $485.6 million, down 1.6 percent.
The group’s second largest subsidiary, Del Monte Philippines Inc., meanwhile, generated sales of $134 million, up two percent from the same quarter last year, on better sales of packaged fruit.
