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Business

DMPL gets OK to issue dollar-denominated securities

Iris Gonzales - The Philippine Star

MANILA, Philippines -  Del Monte Pacific Limited (DMPL), the Philippines and Singapore listed food conglomerate, has received the green light from the Philippine Stock Exchange (PSE) to issue dollar denominated securities in the local stock market, the first issuer for the newly approved product.

According to the offer supplement, DMPL will issue an initial tranche of 25 million preferred shares comprised of 15 million shares for the base offer and an oversubscription option of 10 million at $10 per share to raise at at least $250 million.

The initial tranche is part of the shelf registration of DMPL’s debt program of up to $360 million registered under the Securities and Exchange Commission’s shelf registration facility.

The Campos family-led company has tapped BDO Capital & Investment Corp. as sole issue manager, together with Chinabank, PNB Capital and RCBC Capital Corp. as joint lead underwriters and book runners.

The target issue and listing date is on April 7, according to the offer supplement filed with the PSE.

DMPL intends to use the proceeds from the offer to refinance the bridge loan facility extended by BDO Unibank amounting to $350 million which partially financed the acquisition of the DMFI Consumer Food Business, and offer-related costs.

“This bridge loan facility was extended to up to February 2018, but the company intends to prepay the loan through the offering of the Series A Preference Shares including this offer. The balance of proceeds of this offer, if any, will be used for general corporate purposes. This prepayment of the BDO Unibank bridge loan will allow the company to deleverage and strengthen its balance sheet,” DMPL said.

DMPL is the first company to issue dollar-denominated securities which the SEC earlier approved.

The introduction of DDS aims to provide issuers the flexibility to meet their capitalization requirements. It also offers an alternative instrument for investors with US dollar deposit accounts. In the same manner, the product can also attract offshore investors and reduce their currency risk exposure.

The newly approved PSE rules provide the framework and guidelines for the listing, trading and clearing and settlement of securities that will be issued in dollar denomination.

According to the new DDS rules, PSE listed companies may issue a new set of securities, either common or preferred shares, which are quoted, traded, and settled in US dollars.  

This will provide listed companies the venue to raise new capital in US dollars to meet their dollar needs.  It also gives investors with dollar holdings an investment vehicle that could provide viable returns, according to the PSE.

 

 

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