Under the agreement, SEA Diner will acquire 363.7 million existing ordinary shares in Del Monte Philippines. DMPL intends to use net cash proceeds of approximately US$115 million to settle certain outstanding loans.
SEA Diner is focused on investing in companies in the consumer sector in China and the Southeast Asia region.
The company, together with its affiliates, has invested over US$1 billion in Southeast Asia and Chinese consumer businesses to date, including consumer product and technology companies, according to a DealstreetAsia report.
The deal comes at a time when Del Monte recently shelved plans of issuing an initial public offering (IPO) for its Philippine unit, which targeted to raise net maximum proceeds of about US$324 million
At the time, the company cited volatile market conditions adding that it planned to defer the offering until such a time when market conditions improve.
“As market conditions have yet to improve, no further action has been taken by the company (DMPL) in relation to the proposed public offering,” DMPL said in it’s a statement.
According to DMPL, having SEA Diner as an investor will help Del Monte Philippines grow its fresh fruit sales in China, where SEA Diner has close relationships with online and offline food retailers, among other benefits.
The company said that funds raised in the proposed sale will also allow it to free up certain credit lines and pursue other opportunities after the proposed public offering of its Philippines subsidiary was deferred.
DMPL is a market leader in the Philippines, with market shares ranging from 41 percent to 85 percent in categories such as canned pineapple and mixed fruit, canned and tetra ready-to-drink juices, tomato sauce and spaghetti sauce.