Puregold plans P5-B notes issue

MANILA, Philippines - Grocery chain operator Puregold Price Club Inc. plans to issue up to P5 billion in corporate notes to support its aggressive expansion and planned acquisitions.

The company has tapped First Metro Investment Corp. as lead underwriter and arranger for the issue.

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

Riding on the crest of strong consumer spending, the company is increasing the number of stores it will open this year to 31 from the original plan of 25.

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

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

Puregold caters to the lower-income segment 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.