Del Monte’s US subsidiary mulls going public

MANILA, Philippines — Campos family-owned Del Monte Philippines Inc. (DMPI) may proceed with the initial public offering of its US subsidiary Del Monte Foods Inc. (DMFI) ahead of the planned IPO of its Philippine subsidiary.

“The company’s Philippine subsidiary tried to do an IPO last year, but due to unfavorable market conditions, management decided to put it on hold. As the US financial market appears to be relatively more bullish than the Philippines, barring any unforeseen circumstances, DMFI might commence its IPO process ahead of DMPI,” DMPL said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.

DMPI initially slated the IPO two years ago on June 27, 2018 and revived it in 2020, but decided to shelve this again due to the COVID-19 pandemic.

It was targeting to raise as much as P44.07 billion from a public offer of 699.3 million secondary common shares priced at up to P54.80 per share, plus up to 104.9 million secondary common shares for the over-allotment option.

Gross proceeds could have amounted to P38.32 billion at the maximum offer price. Assuming that the over-allotment option is fully exercised, the offer could have raised an additional P5.75 billion.

DMPI is a food manufacturer operating four main product segments, namely convenience cooking and dessert, healthy beverages and snacks, premium fresh fruit, and packaged fruit and beverages- export.

Its Del Monte brand offers a line of ketchup, tomato sauce and paste, pasta, spaghetti sauce, and packaged pineapple products, among others.

It is a wholly-owned subsidiary of DMPL, which is listed on the Philippine Stock Exchange and Singapore Exchange Ltd.

DMPL has incurred a net loss of $30.5 million in the first quarter of its fiscal year ending July 2023, a reversal of the prior year’s net profit of $18.3 million.

However, without one-off costs, DMPL would have generated a net profit of $19.6 million, seven percent higher than a year ago as DMFI would have generated a net profit of $8 million or 67 percent higher on lower interest expense.