RFM raises P1.6 B from private placement

MANILA, Philippines - Food and beverage firm RFM Corp. is raising more than P1.6 billion from a private share sale to prepare the company for potential acquisition and expansion opportunities.

In a disclosure to the stock exchange, the Concepcion-led company said its current shareholders offered to sell 340 million RFM shares at P4.77 apiece.

“Settlement for the offer shares is anticipated to occur on Oct. 9,” RFM said. The offer price represents a 5.54-percent discount compared with Thursday’s closing of P5.05 per share.

The company hired Maybank ATR Kim Eng Securities Inc. to sell the shares owned by Horizons Realty Inc., BJS Development Corp., Triple Eight Holdings Inc. and RPMC Resources Inc.

Under the firm’s fund-raising scheme, majority shareholders will sell 450 million common shares to new investors.

The selling stockholders will then subscribe to 450 million new shares to be issued by RFM.

RFM said it received consent from most stockholders, allowing the management to remove the pre-emptive rights for the issuance or disposition of any class of shares.

Late in July, the company behind Selecta ice cream and White King Fiesta pasta revived its plan for an equity offering.

RFM’s board of directors allowed the management to proceed with the share sale that was approved way back in 2011.

In January 2011, shareholders approved the follow-on offering of common shares to raise between P800 million and P1 billion.

But concerns over inflation and high cost of raw materials dampened investor sentiment, prompting RFM to shelve its fundraising plan.

Proceeds from the top-up share sale prepares the firm for potential acquisition and expansion opportunities in the food business, RFM executive vice-president and chief operating officer Felicisimo M. Nacino Jr. said earlier.

The food and beverage maker tripled its capital spending to P1 billion this year to expand its macaroni, ice cream and bread production. In the first half, RFM’s earnings jumped 28 percent to P387 million from P302 million in the same period last year on the back of strong consumer spending and lower input costs.

RFM is a market leader in several brands. Selecta, which is a joint venture with Anglo-Dutch consumer goods giant Unilever, already corners 74 percent of the local ice cream market.

RFM’s White King Fiesta division, which includes its fast-growing pasta business, holds 31.4 percent of the market.

The food and beverage firm is looking to fasttrack its growth through possible acquisitions and strategic partnerships. RFM expects to jack up its profits by 15-20 percent this year from P682 million last year.