Puregold mulls notes issue

MANILA, Philippines - Grocery chain operator Puregold Price Club Inc. is mulling the issuance of corporate notes to fund its aggressive expansion and potential acquisitions.

In a disclosure to the Philippine Stock Exchange yesterday, Puregold said it has tapped First Metro Investment Corp. as lead underwriter and arranger for the issue.

Puregold, the country’s second biggest supermarket chain, is seeking to double its store network by 2015 as it expands into Visayas and Mindanao. It ended the first half of 2012 with a total of 134 outlets – 109 of which are Puregold, six S&R Membership Shopping Club and 19 Parco supermarkets.

Buoyed by strong consumer spending, the company is increasing the number of stores it will open this year to 31 from the original guidance of 25.

To further expand its presence in the country and attract a larger clientele, Puregold is looking to acquire more grocery stores or supermarkets.

Puregold acquired 100 percent of S&R through a P16.5-billion share swap deal, allowing the family of Lucio Co to consolidate all retailing businesses under a single publicly-listed corporation targeting all market segments.

Puregold caters to the lower-income with a market share of 16 percent. On the other hand, S&R, which caters to the middle and upper class consumers, has a market share of 3.3 percent.

The group acquired the Parco supermarket chain in a deal valued at around P760 million to serve the mass market. Of the 19 stores, 12 are located in Manila, three in Bulacan and four in Rizal.

The group expects to grow total sales by 50 percent this year from P39 billion in 2011 on the back of new store openings.