Campos pivots to China, trims Phl stake to save US venture
Oh, the perils of leveraged buy-out. Condiments king Joselito “Butch” Campos Jr. welcomed the Year of the Rat scrambling to pay off debts, with a pivot to the China market in a bid to save his US empire.
His Singapore-listed Del Monte Pacific announced over the weekend that it is selling a 13 percent stake in subsidiary Del Monte Philippines for $130 million to reduce Campos’s continuing debt indigestion caused by his 2013 acquisition of the much bigger Del Monte Foods in the United States.
The portfolio company, SEA Diner Holdings, owners undisclosed despite their supposed $1-billion investments in regional and Chinese consumer businesses, “can help (Del Monte Philippines) penetrate the largest convenience store networks in China,” Del Monte said in a statement.
Moreover, the mystery investor can help Del Monte “develop and execute” digital strategy and identify, in a phrase pregnant with meaning, “key senior management hires and management succession planning.”
The $130-million new money is incidentally less than half of what Del Monte had wanted to raise in a canceled initial public offering in 2018.
In exchange, the mysterious investor has exacted its proverbial pound of Campos’ flesh: The redemption price after five years, should Del Monte fail to execute an earlier exit timetable, will carry an eight percent interest compounded yearly.
Ouch!
Del Monte said it needed the new cash “to partially prepay/ repay certain loan facilities” related to its $1.7-billion acquisition of Del Monte Foods in the United States six years ago.
At that time, the Philippine operations obtained a $1.28-billion credit backing from the likes of Citigroup, Morgan Stanley, KKR Capital Markets, and, locally, from BDO and BPI to take over the Del Monte consumer products operations not only in the US, but also in South America.
The continued hemorrhaging of the US venture has already caused the Del Monte Pacific minority shareholders to lose their shirts, if not their meager savings.
From a pre-merger of P27 a share, Del Monte was, despite the latest announcement, lightly trading yesterday between P5.02 and P5.10.
Bong Go, Bato shield has no-effect
Having Senators Bong Go and Bato dela Rosa as fellow sponsors in a wedding apparently has no effect on socialite Tingting Cojuangco’s being banned from the Baguio Country Club.
Cojuangco, according to a letter from counsel Renato Corpuz Jr., will stand as principal sponsor along with the two senators on a Feb. 1 wedding at the Philippine Military Academy, with the subsequent reception at the BCC.
The groom, according to the grapevine, is an officer of the Presidential Security Group, in addition to his being a PMA graduate.
Cojuangco had earlier been declared persona non grata for having aligned herself in a series of court suits against the club management, among other alleged club offenses, prompting the aunt-in-law of PNoy to hire the Corpuz Ejercito Macasaet Rivera & Corpuz Law Offices to seek her membership, pointing to her owning two BCC shares.
But the BCC management stood its ground, saying the ownership of a share, much like the Kim Wong case in the Manila Golf Club, does not automatically guarantee membership.
“BCC has very strict membership rules,” said a BCC officer who asked not to be identified by name. “It rejected a then current congressman for membership; he was forced to sell his share.”
“The club suspended for six months the mother of a sitting Supreme Court justice, and the son could do nothing about it,” the same BCC officer added.
According to the grapevine, the Baguio club has, in addition to Cojuangco, over 50 names in its so-called PNG list.
Moreover, “our records do not show an application for membership (has been) filed by your client,” BCC general manager Anthony de Leon wrote back to Corpuz.
Cebu is literally taking more flights away from Imperial Manila. The thrice-a-week service between Cebu and Los Angeles that Philippine Airlines will relaunch in May are the same flight entitlements that PAL is currently using between Manila and the City of Angels.
In other words, the flag carrier will be shifting the three Manila flights to Cebu, while maintaining its regular twicedaily service between NAIA and LAX.
It also helps that PAL’s new president, Gilbert Santa Maria, is married to a De La Rama from Cebu.
E-mail: moneygoround.manila@yahoo.com