DEL Monte Pacific on Friday announced that it has obtained approvals for its proposal to undertake a renounceable underwritten rights issue in Singapore and a stock rights offering in the Philippines of up to 641.9 million new ordinary shares at an issue price of S$0.325 or 10.60 Philippine pesos for each rights share.
The issue price of S$0.325 represents a discount of approximately 30.9 per cent to the closing price of S$0.47 per share on the Singapore Exchange (SGX) as of Jan 29 (being the last trading day of the shares on the SGX before the announcement), as well as a discount of 20.6 per cent to the reference price of S$0.409 per share.
As at Friday, the rights shares represent approximately 49.3 per cent of the existing issued share capital of the company (1.3 billion shares). Assuming that the 641.9 million rights shares are fully taken up, the company said that its enlarged share capital will be 1.9 billion shares (excluding treasury shares).
Based on the 641.9 million rights shares, the gross proceeds of the rights issue will come up to about S$208.6 million. After deducting expenses of approximately S$6.1 million, the net proceeds of the rights issue are expected to be about S$202.5 million. All the net proceeds will be channelled towards the repayment of the bridging facility of up to US$165 million from the Bank of Philippines Islands that Del Monte had obtained to partially finance the acquisition of the consumer food business which was completed on Feb 19, 2014, said Del Monte.
The rights issue will also allow Del Monte to deleverage and strengthen its balance sheet, added the company.