Century Pacific gets P3.4-B loan

MANILA, Philippines - A Singaporean sovereign wealth fund, one of the world’s largest asset management firms, is pouring in more than P3 billion in the parent firm of soon-to-be-listed Century Pacific Food Inc., the Philippines’ largest canned goods producer.

In a regulatory filing, Century Pacific said its parent firm Century Canning Corp. (CCC) and the Government of Singapore Investment Corp. (GIC) signed an exchangeable loan deal for a principal amount of P3.4 billion.

“CCC will use the proceeds to finance growth and expansion of existing subsidiaries, including but not limited to Century Pacific, possible acquisitions, possible entry into new businesses and other general corporate purposes,” the firm said.

“The financing provided by this transaction will allow us to support our various businesses, including Century Pacific Food, as well as take advantage of opportunities that arise from out fast growing economy,” said CCC president and CEO Christopher Po.

The exchangeable loan agreement is valid for one year with an interest rate of five percent.

Under the deal, GIC will have the option to exchange both the principal and accrued interest into 245.5 million issued and outstanding shares of Century Pacific, equivalent to the initial public offering (IPO) price of P13.75 apiece.

It will allow GIC to own around 11 percent of Century Pacific’s issued and outstanding shares.

“The entrance of GIC as a partner of CCC, and possible shareholder of Century Pacific, is a vote of confidence in the Philippine economy’s strong long-term fundamentals as well as the value and management capability of both CCC and Century Pacific,” the firm said.

“We look forward to a long term, value creating partnership with them,” Po said.

GIC is one of the world’s largest fund management companies with more than $100 billion in assets under management.

For its part, CCC is into the sales and distribution of canned and processed tuna, sardines and milkfish.

Subsidiary Century Pacific last week concluded its IPO that raised P.2 billion in gross proceeds. Its shares will debut in the local bourse on May 6.

Proceeds from the second IPO this year will be used to pay short-term obligations, complete a tin can manufacturing factory and dairy mix plant facility in Taguig, and support general working capital given an intensified marketing and sales initiative or possible acquisition.

Century Pacific is banking on its market leadership in the consumer-based Philippine economy, and multi-category, multi-brand product portfolio with a strong record of product innovation and successful new product introduction.

Century Pacific, the firm behind leading brands Century Tuna, Argentina and 555, is the Philippines’ largest producer of canned goods, cornering 84.1 percent of the domestic canned tuna market, 42.5 percent for corned beef and 25.6 percent for meat loaf.

Last year, profits of Century Pacific hit P690.29 million as net sales reached P19.06 billion.

Century Pacific started operations in 1978 when businessman Ricardo S. Po Sr. set up Century Canning. Other brands of Century Pacific include BlueBay, Wow, Birch Tree, Angel, Fresca, Lucky 7 and Shanghai.