Foodcart operator Fruitas Holdings Inc. plans to list newly-acquired bakery chain Balai Pan de Sal on the Philippine Stock Exchange to raise much as P309 million in proceeds.
Fruitas said in a disclosure to the stock exchange Monday its board approved the offering of 375 million common shares of Balai plus an over allotment option of up to 37.5 million shares to be sold at P0.75 apiece.
“We evaluated several capital-raising options to fund the next phase of growth of Balai. Given the significant growth prospects of the bakery sector, distinct from the kiosks within Fruitas Holdings, we decided to undertake an IPO for Balai,” Fruitas president and chief executive Lester Yu said.
“This will provide Balai its own resources to take advantage of the opportunities presented to it,” he added.
Fruitas in June acquired Balai, which had only five outlets at that time. Fruitas has since expanded to 23 stores.
“The primary proceeds will be used to expand Balai’s store network in major Philippine cities and establish its own commissary to serve more customers. Part of the new capital will also be utilized to explore the possibility of acquiring other baked goods firms to broaden the company’s current product offerings,” Yu said.
Fruitas by 2023 plans to establish 150 Balai Pandesal outlets across the country.
Yu said Balai’s IPO will be beneficial for Fruitas as it unlocks the value of bakery chain. Fruitas Holdings will remain the controlling shareholder of Balai and continue to benefit from its profits.
Balai currently operates three brands: Balai Pandesal, which sells baked goods in community stores throughout neighborhoods and central business districts, Buko ni Fruitas, and Fruitas House of Desserts, which both sell fruit-based desserts in high-traffic locations including malls and commercial centers.
Subject to regulatory approvals and market conditions, Balai plans to schedule the offering period in March 2022 and list on the PSE’s SME board before the end of the first quarter of 2022.
Fruitas is the leading operator of small-footprint food and beverage retail stores with 25 brands in its portfolio.