Del Monte Pacific gets extension on BDO loan

DEL MONTE Pacific Ltd. has received a two-year extension on a $350-million loan with BDO Unibank, Inc. while it finalizes what could become the first dollar-denominated securities (DDS) offered and listed on the local bourse.

In a regulatory filing on Tuesday, the company, listed both in Singapore and the Philippines, announced that BDO agreed to extend the loan for two years from Feb. 10 on the same terms and conditions.

Del Monte is looking to refinance the loan by issuing dollardenominated preferred shares in the Philippine market. It has registered 36 million shares worth $360 million with the Securities and Exchange Commission (SEC) for shelf offering.

On Tuesday, the company disclosed the Bangko Sentral ng Pilipinas, the SEC and the Philippine Stock Exchange, Inc. have already approved the sale, listing and trading of the DDS.

BDO Capital & Investment Corp. serves as the manager of the proposed issue. In an earlier interview, the investment bank’s President Eduardo V. Francisco said Del Monte wanted to launch the offer in the first month of 2017.

The company had planned to issue the initial tranche comprising 15 million preferred shares with a maximum price of $ 10 apiece along with an oversubscription option for 10 million shares as early as Jan. 25 and list them on Feb. 5.

But the SEC only approved the shelf registration of Del Monte for the perpetual, cumulative, nonvoting, non- participating, nonconvertible series A preferred shares on May 31.

The company further awaited the approval of the rules governing the trading of DDS on the local bourse. The SEC already approved the framework in November 2016, but no broker has sought accreditation for the trading of such securities so far.

“Pursuant to the DDS Rules, Del Monte is awaiting the eligible brokers’ enhancement of their systems for dollar denominated trading,” the company’s disclosure read.

In the six months to October 2016, Del Monte booked a 69% year-on-year decline in profit to $11.44 million, as sales in the United States dropped and costs increased for the closure of a plant there.

The company recorded $ 37.1 million in earnings for the same period in fiscal 2016 largely from the $ 30.4- million one- time gain realized from the amendment of the retirement plan of a subsidiary in the US.

Shares in Del Monte closed 10 centavos or 0.84% lower at P11.80 apiece on Tuesday. —