Del Monte Pacific Ltd. (DMPL) is set to borrow from two locally listed banks, BDO Unibank Inc. and Bank of the Philippines Islands (BPI), as much as $515 million to bankroll the acquisition of its US-based unit.
Dual listed at the Singapore Exchange and the Philippine Stock Exchange, DMPL disclosed to both bourses on Wednesday that it entered into a bridge loan arrangements with BDO and BPI to partially fund the proposed acquisition of Del Monte Corp.’s consumer food business. In an earlier announcement, DMPL said that it intends to fund the proposed acquisition through a combination of equity and institutional debt financing.
Proceeding with its planned fund-raising, DMPL entered into a bridge loan facility agreement for up to $350 million with BDO and a term loan facility agreement for up to $165 million with BPI, which is guaranteed by NutriAsia Pacific Ltd. The company also stated before that it intended to undertake a share placement of $150 million as part of the funding for the proposed acquisition.
“The company is in discussions with strategic investors to finalize the terms of an equity investment into the group. The investment amount will be about $74.5 million and it will be used to partially fund the proposed acquisition,” DMPL told the local bourse.
“On this basis, the balance of the funding to be raised is $75.5 million which can be raised either through a share placement or a medium-term loan or a combination thereof,” it added.
In November last year, DMPL announced that it will acquire the consumer food business of Del Monte Foods (DMF) for $1.7 billion, or approximately P73 billion.
Under the terms of the purchase agreement, DMPL will purchase the brands and certain assets, and assume certain liabilities of DMF’s consumer food business in the US.
The acquired consumer food business will be managed under a separate platform and will be led by a US-based chief executive officer and management team.