Del Monte Philippines gets SEC’s green light for P44.07-B IPO

MANILA, Philippines (Update 1, 12:05 p.m.) — Food manufacturer Del Monte Philippines Inc. has secured regulatory approval for its P44.07-billion initial public offering, which would come at a turbulent time for the stock market amid pandemic-induced uncertainties.

The Securities and Exchange Commission announced Friday it greenlighted Del Monte Philippines’ planned maiden share sale, but “subject to the company’s compliance with certain remaining requirements.”

"Among others, (Del Monte Philippines) will still have to submit the final prospectus for the IPO, which should provide more clarity on some information about the company and its offer," the SEC said. The company "will receive the corresponding order of registration and permit to sell after complying with the conditions set by the SEC,” corporate regulators added.

The company best known for its tomato and pineapple offerings would sell 699.3 million secondary common shares to the public for the first time at a price of P54.80 each. If there’s great demand from investors, Del Monte Philippines would sell 104.9 million more shares.

It was a plan that dated back three years ago, but was pushed back by Del Monte Philippines after a weak currency at the time battered the local stock market. 

Broken down, gross proceeds from the IPO could amount to P38.32 billion should the company decide to stick with its original offer price. Assuming that the overallotment option is fully exercised, the offer can raise an additional P5.75 billion.

The company will conduct the IPO from August 9 to 13 and debut on the Philippine Stock Exchange on August 23.

Proceeds from the jumbo IPO would be used by Del Monte Philippines’ listed parent, Del Monte Pacific Limited, to pay old debts as well as redeem certain preferred shares and provide general budgetary support to the company.

Despite disruptions from the pandemic, Del Monte Philippines’ balance sheet stayed healthy. The company netted P4.6 billion in fiscal year 2021 ending April, up 33% year-on-year. Much of the lift came from 8% annual increase in sales to P34.5 billion, close to two-thirds of which was generated onshore while the rest was from international markets, figures showed.

As of 10:27 p.m. Friday, shares in Del Monte Philippines’ parent company were trading flat at P15.40 each.

Editor's note: Updated to include a clarification from the SEC on the "remaining requirements" that Del Monte Philippines has to meet for its IPO.