Monde Nissin will use 28.6 percent or P17.308 billion of its projected net proceeds of P60.516 billion proceeds from its initial public offering to retire the convertible note issued to Arran, an affiliate of Singapore sovereign wealth fund GIC, in April 2019. The funds raised from the Arran convertible note, which represent 6.44 percent of Monde Nissin’s capital stock, were used to refinance loans and reduce mandatory debt payments of Monde Nissin.
Abacus Securities, however, was puzzled why Arran would leave Monde Nissin this early.
“Arran’s conversion price is Php18.47 which is lower than the maximum IPO price of P17.50. So it is understandable that the Singapore-based fund would rather get bought out rather than to convert and sell at a lower price. Still, this background gives rise to the question of why Arran is selling if the prospects of Monde are indeed bright,” Abacus Securities said.
Arran remains bullish on the Philippines as it announced last month its plan to pump in P11.88 billion for a 17.5 percent interest in AC Energy.
Aside from redeeming Arran’s note, the Monde Nissin IPO proceeds will be used for captial expenditures (P26.519 bllion) and rapymanet of loans (P16.689 billion) owed to BDO Unibank, Metrobank, and Bank of the Philippine Islands.