Balai Ni Fruitas, which operates a chain of bakeries and juice shops, is planning a P309.38-million initial public offering (IPO) next month to fund its expansion plans and for potential acquisitions.
According to the Securities and Exchange Commission (SEC), the subsidiary of Fruitas Holdings, Inc. filed its registration statement on Feb. 17.
Balai will be offering as much as 325 million primary common shares. Meanwhile, its parent firm, Fruitas Holdings, will be selling 50 million secondary common shares, along with an overallotment option of up to 37.5 million common shares.
IPO shares will be priced up to 75 centavos apiece. According to its prospectus dated Dec. 27, 2021, the final price will be set on March 7.
“The Company will not receive any proceeds from the offer of the secondary shares and option shares,” Balai said.
Balai may raise up to P243.8 million in gross proceeds from the sale of 325 million primary common shares. The company may net up to P220.4 million from its IPO.
“The Company intends to use the net proceeds from the Offer for the store network expansion, commissary set-up and potential acquisition opportunities of the Company,” Balai said.
Majority or 81.8% of its proceeds worth P180.4 million will be used for its store network expansion. The company aims to open 120 new owned stores in Metro Manila and “selected urban areas” across the country until the end of next year.
The company owns bakery chain Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts. Buko ni Fruitas offers fresh coconut drinks, while Fruitas House of Dessert serves fruit shakes and desserts.
“Vast majority of the stores to be opened from 2022-2023 are anticipated to carry the Balai Pandesal brand. Moreover, the Company also expects to expand the footprint of its other existing brands and future acquisitions which will depend on, among others, market opportunities and commercial considerations,” Balai said.
Balai plans to allocate P20 million for its plans to set up commissaries in 2022, while another P20 million will be used to acquire other baked goods brands.
“The Company’s potential target acquisitions will be geared towards broadening its baked goods product offering and/or adding sales channels. The Company is still in the early stages of evaluating these options and there are no definitive agreements signed,” Balai said.
In a statement in December, Fruitas Holdings President and Chief Executive Officer Lester C. Yu said it decided to take Balai public due to the “significant growth prospects of the bakery sector.”
Balai plans to conduct its offer period from March 16 to 22, while its tentative listing date at the small, medium, and emerging board of the Philippine Stock Exchange is set on March 30. The company has yet to decide on its stock symbol.
The company tapped First Metro Investment Corp. as the transaction’s issue manager, bookrunner, and underwriter.