Puregold completes P12-B notes offer for store expansion

PUREGOLD Price Club, Inc. has concluded its P12-billion fixed-rate corporate notes issuance, which raised funds for its store network expansion, it told the exchange on Thursday.

The grocery operator completed the notes issuance on Sept. 30, marking the company’s largest capital market fundraising in history.

The issuance was 1.3x oversubscribed by universal banks, government financial institutions, foreign banks and an insurance company. It is composed of P7-billion notes that have a seven-year tenor, and P5-billion notes that have a 10-year tenor.

“Having been away from the local debt capital market since its last issuance in 2012, the company is very pleased with the tremendous reception for its corporate notes offering,” it said.

“[This] demonstrates [the market’s] confidence in the expected economic recovery of the Philippines and the opportunities that it will bring,” it added.

Puregold plans to use the proceeds from the issuance to support its business expansion, particularly the opening of more Puregold and S&R stores across the country.

The company currently has 444 stores nationwide, composed of 385 Puregold stores, 20 S&R membership shopping warehouses and 39 S&R pizza stores. It said in May that it planned to open 25 new Puregold stores and two new S&R stores this year.

“Despite the [ coronavirus] pandemic, [Puregold’s] expansion plans remain in place, and the current health crisis has further emphasized the need to go into locations where the company has no presence in order to provide basic goods and essential products to those markets,” it said.

Puregold engaged with China Bank Capital Corp. as the lead arranger, joint lead underwriter and sole bookrunner for the offering. It also tapped Development Bank of the Philippines and Land Bank of the Philippines as joint lead arrangers and joint lead underwriters, and First Metro Investment Corp. as co-underwriter.

In the first six months of 2020, Puregold’s profits grew 20% to P3.4 billion, as its sales increased 15% to P83.58 billion, due to the heightened demand for basic necessities during the strict lockdown.

Shares in Puregold at the exchange chipped off 50 centavos or 1.02% to P48.50 each on Thursday. —