Fruitas reveals plan to IPO its Balai ni Fruitas subsidiary in March
In a series of disclosures, FRUIT’s [FRUIT 1.22 0.81%] board said that it plans to IPO its baked goods subsidiary, Balai ni Fruitas, in March of this year in order to “take advantage of the opportunities presented to it”.
FRUIT still has yet to submit an application to the SEC, but said that it plans to 325 million primary common shares at up to P0.75/share, plus an additional 50 million secondary common shares owned by FRUIT, and an over-allotment option, for a total sale of 412.5 million common shares.
Proceeds raised from the primary portion of the sale will go toward store expansion of the Balai ni Fruitas brands, which include Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts.
Balai ni Fruit currently has 69 stores between these three brands (23 for Balai Pandesal) and said that it hopes to grow the Balai Pandesal brand in particular to over 100 stores by the end of this year and 150 stores by the end of 2023.
MB BOTTOM-LINE
FRUIT is all grown up! I have to admit that this announcement caught me by surprise, but I like the feeling of this surprise a whole lot better than what I felt after I found out FRUIT’s (now cancelled) plans to expand into the medical services industry.
FRUIT will raise a little bit of money in the deal through the sale of the secondary shares and the over-allotment option (about P65 million at the P0.75/share price), and it will unlock some value for FRUIT shareholders while at the same time giving all of us investors another option in the quick service restaurant category.
As an investor, I appreciate the ability to “zoom in” on my strategy. If I felt that baked goods were the next fintech, I’d much rather invest directly in Balai ni Fruitas (I sure hope they go with the BALAI ticker symbol; BNF honestly sounds drab) than indirectly in the sector through a more generalized bet on FRUIT that requires me to carry the risk of the organizations other food businesses.
This IPO is still just a baby, though, since FRUIT still needs to make a formal application to the SEC and provide a preliminary prospectus. They’ll have to do that pretty soon, though, if they want to list by the end of March. Time is ticking. I’ll be sure to cover the prospectus in great detail when it’s made available.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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