Fruitas to use Balai IPO proceeds to buy Ling Nam

Published July 4, 2022, 2:54 PM

by James A. Loyola

Fruitas Holdings Inc. will be using its share of the proceeds from the initial public offering of subsidiary Balai ni Fruitas to pay for its acquisition of Ling Nam Wanton Parlor and Noodle Factory.

In a disclosure to the Philippine Stock Exchange, the firm said the IPO raised about P203.8 million in net primary proceeds for BALAI and minimum gross proceeds of P35 million for Fruitas, with additional proceeds potentially coming after the price stabilization period for a total of up to P61.3 million.

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Fruitas is expected to book a one-time gain on the sale of existing shares in Balai ni Fruitas, which will result in an increase of its equity. Proceeds at the Fruitas level will be deployed into new strategic initiatives, including the acquisition of Ling Nam.

About one year after acquiring certain assets of the Balai Pandesal business, Fruitas listed the shares of Balai last June 30.

“The listing opens more opportunities for us to be nimble and respond to our customers’ evolving preferences. The IPO proceeds and the Company’s strong cash generation from our operations will allow us to aggressively grow our business,” Balai President and CEO Lester Yu said.

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The Company has aggressively expanded the Balai Pandesal brand from 5 stores at time of acquisition to 38 stores as of June 2022. It opened 3 new Balai Pandesal stores in different parts of Metro Manila in June 2022 and targets to grow its Balai Pandesal store network to 130 by 2023, and 200 by 2026.

Balai Pandesal products are also available in 54 stores within Fruitas’ store network, including some of its other community stores.

The Company also targets to acquire or introduce value-adding concepts which would fit into its baked goods lineup.

Balai continues to look at significant opportunities within the more than $6 billion baked goods segment in the Philippines.

 
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