December 17, 2010
Pure Foods eyes more than US$300 million from shares offer
Philippine conglomerate San Miguel Pure Foods Co. Inc. plans to raise as much as PHP15 billion (US$339.81 million) from a preferred share offering targeted in the first quarter of 2011.
In its registration statement filed with the Securities and Exchange Commission, Pure Foods said the preferred shares will be sold at PHP1,000 (US$22.65) each. The preferred share issue is part of a programme to raise a total of PHP50 billion (US$1.13 billion) to fund its expansion and diversification into new businesses to include power generation, water and infrastructure.
Pure Foods earlier reclassified 40 million common shares into non-voting, cumulative and non-participating preferred shares.
The terms of the preferred share offering such as dividend rate and payment shall be subject to the SEC's approval of the reclassification of the company's common shares to preferred shares.
Pure Foods' preferred share issuance followed failed negotiations between its parent firm San Miguel Corporation and two prospective buyers – the consortium of the Campos family and private tuna canner Century Pacific Group, and Universal Robina Corp. of the Gokongwei family.
San Miguel rejected their offers since these companies wanted to acquire 100 percent of Pure Foods. The conglomerate was only willing to divest up to a 49-percent stake in the food processing firm.
San Miguel owns 99.92 percent of Pure Foods, which owns the Pure Foods, Magnolia, Monterey, Star, San Mig Coffee and B-Meg brands.
As of end-March this year, Pure Foods had PHP121.07 billion (US$2.73 billion) in cash and near-cash assets as against PHP209.4 billion (US$4.73 billion) in the same period a year ago.
For its part, San Miguel is also planning a PHP75-billion (US$1.69 billion) fund raising programme to fund acquisitions as it seeks stronger avenues to fuel growth. It has raised around US$3 billion from asset sales in the past three years.
The food giant is hard-pressed to raise funds to cover the purchase substantial stakes in several companies including power distributor Manila Electric Co., oil refiner Petron Corp., Bank of Commerce, Caticlan International Airport and Development Corp., several power plants, toll-road operations and coal mines.
