Fruit grower and canner Del Monte Pacific Ltd. said it plans to raise as much as $360 million through the issuance of perpetual preferred shares in the first half of 2016.
The issue is part of the company’s thrust to convert of a substantial amount of its loans from short- to medium-term in order to significantly improve the group’s current ratio and liquidity.
Del Monte said in a disclosure to the Philippine Stock Exchange it planned to issue dollar-denominated perpetual preference shares in the Philippines to be listed at the Philippine Stock Exchange.
Del Monte said it would launch the equity deal in 2016 after obtaining regulatory approvals and assessing the market conditions.
Del Monte, meanwhile, said net income in the first six months of fiscal year ending October 2015 hit $41.3 million, a turnaround from a loss of $21.7 million year-on-year.
Consolidated sales also jumped 20 percent to $1.13 billion from $993.6 million recorded in the same period a year ago on higher turnover from Americas and Asia Pacific markets.
“After incurring losses arising from acquisition and transition-related expenses for the purchase of Del Monte Foods, we are on track to continue improving our financial performance having laid a strong foundation for sustained profits in the remainder of the year,” Del Monte managing director and chief executive Joselito Campos said.
Barring unforeseen circumstances, the group expects to sustain profits in the remainder of the year and return to profitability in fiscal year 2016.
Del Monte also expects US unit Del Monte Foods Inc. to sustain its growth momentum in the second half fiscal year.
“Our performance in the second quarter reflects the fundamentals that have been restored since the group’s acquisition, coupled with effective promotion of our products in the retail channel along with cost optimization programs,” said Del Monte Foods chief executive Nils Lommerin.
“We expect to maintain the momentum in the second half of our fiscal year having established Del Monte as the brand of choice for festive occasions. As we continue to unlock the growth potential of our products, accelerate our penetration of the food service sector and enter new vegetable market segments through Sager Creek, our results will improve further,” he said.
The group’s cash flow is expected to improve in the second semester with peak sales around Thanksgiving, Christmas and Easter, coupled with lower working capital needs past the production peak in October.
Del Monte Foods contributes about 80 percent to the group’s performance.