Fruitas Holdings eyes P309-M IPO for Balai subsidiary

FRUITAS HOLDINGS, Inc.’s wholly owned subsidiary Balai ni Fruitas, Inc. is looking to tap the stock market with a P309-million initial public offering (IPO), subject to regulatory approvals and market conditions.

In a statement on Monday, Fruitas Holdings said Balai ni Fruitas’ IPO aims to raise funds for the subsidiary’s store network expansion, commissary setup, and for future acquisitions.

“We evaluated several capital-raising options to fund the next phase of growth of [Balai ni Fruitas],” Fruitas Holdings President and Chief Executive Officer Lester C. Yu said.

He said the group decided to undertake an IPO for Balai ni Fruitas given “the significant growth prospects of the bakery sector, distinct from the kiosks within Fruitas Holdings.”

Mr. Yu said the move would provide the unit with its own resources “to take advantage of the opportunities presented to it.”

The offer is subject to the regulatory approval of the Securities and Exchange Commission and the Philippine Stock Exchange (PSE).

Balai ni Fruitas currently has three brands under its belt, namely: Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts.

“The primary proceeds will be used to expand [Balai ni Fruitas’] store network in major Philippine cities and establish its own commissary to serve more customers,” Mr. Yu said.

The company has a combined 46 Buko ni Fruitas and Fruitas House of Desserts stores. Both brands sell fruit-based desserts in malls and commercial centers.

Meanwhile, Balai ni Fruitas acquired some of Balai Pandesal Corp.’s assets in June this year and has since increased Balai Pandesal outlets to 23 as of end-September from only having five stores. Balai Pandesal sells baked goods via community stores in neighborhoods and central business districts.

Balai ni Fruitas is planning to grow the number of Balai Pandesal outlets to 100 stores across the country by the end of next year and to 150 by end-2023.

“Part of the new capital will also be utilized to explore the possibility of acquiring other baked goods firms to broaden the company’s current product offerings,” Mr. Yu said.

Balai ni Fruitas plans to offer up to 325 million primary common shares to the public for up to 75 centavos per share. 

In a separate disclosure, Fruitas Holdings’ board of directors also approved to sell up to 50 million secondary common shares of Balai ni Fruitas to increase the IPO size and its public float. It is also allotting 37.5 million secondary shares as an overallotment option.

Should the overallotment option be exercised, Balai ni Fruitas’ public float may reach 27.6%.

The company is planning to run the offer period in March next year and aims to list on the PSE’s small, medium, and emerging board before the end of the first quarter.

Balai ni Fruitas mandated First Metro Investment Corp. as the issue manager, bookrunner, and underwriter for its IPO.

Mr. Yu said the Balai ni Fruitas IPO “will also be beneficial for Fruitas Holdings shareholders as it unlocks the value” of the subsidiary. He added that Fruitas Holdings will remain the controlling shareholder of Balai ni Fruitas and will continue to benefit from its profits.

On Monday, shares in Fruitas Holdings at the stock market declined 1.63% or two centavos to close at P1.21 apiece. — Keren Concepcion G. Valmonte