Fruitas Holdings says market is ripe for IPO

Lester Uy, right, founder and CEO of Fruitas Holdings Inc. is shown during a store visit in this undated file photo. The company is going for an initial public offering (IPO) on the Philippine Stock Exchange next November. Fruitas Holdings

Unfazed by the number of companies going public this year, food and beverage kiosk operator Fruitas Holdings Inc. said market conditions are ripe for a maiden share sale.

In an interview with reporters, Fruitas founder and CEO Lester Yu said plans for an initial public offering (IPO) have been discussed for quite some time, and now is the right time to go public.

“‘Yung bulkan kumukulo, matagal nang kumukulo. Hindi na mapigilan pag ang bulkan puputok. Ito na ‘yung panahon. Ayaw na, ayaw na magpapigil, gusto nang pumutok,” he told reporters in Makati City.

The company is eyeing to generate P1.2 billion from the IPO. It plans to offer up to 533.660 million primary common shares, with an over-allotment option of up to 68.340 million at a maximum price of P1.99 per share.

“The market’s more conducive, at least in our opinion. Also, we’re looking at our growth plans and our funding requirements, we thought it best to raise equity at this point,” said Calvin Chua, chief financial advisor at Fruitas.

Fruitas is expected to gain gross proceeds worth P1.06 billion, the bulk of which will fund the expansion of the company’s core business.

The money be used to finance store network expansion (P586 million), acquisitions and introduction of new concepts (P150 million), commissary expansion (P50 million), opening new food parks (P50 million), and debt repayments on working capital loans (P150 million).

After it was incorporated in 2015, Fruitas grew its portfolio by acquiring several brands such as the Original Jamaican Patty and Sabroso Lechon.

“It’s been a plan and we wanted to prepare well ... We also wanted to make sure that our story is ripe for the investing public,” Chua added.

With an offer period scheduled on November 18 to 22, Fruitas is competing for the investing public as other companies conducting their own IPOs year.

Among such companies are Villar-led AllHome Corp., Axelum Resources Corp., Cal-Comp Technology (Philippines) Inc., and Metro Pacific Hospital Holdings Inc.

“Wala namang problema ‘yun, sila mamroblema,” Yu said. “Ibang industriya naman. Masaya nga kasabay.”

Chua said the company is banking on its core business to spur interest from the investing public.

“It’s a different industry. For us, the connection with consumers is more direct so we serve our products to the Filipinos every day,” he said.

“It illustrates the vibrancy of the market. It’s also good raising capital at this point,” Chua added.

As of end-June 2019, Fruitas has 949 stores, of which 774 are company-owned and 175 are franchised.

It has over 20 brands in its portfolio, including Fruitas Fresh From Babot’s Farm, Buko Loco, Juice Avenue, Buko Ni Fruitas, Johnn Lemon, and Black Pearl.

The portfolio also includes food parks such as Uno Cinquenta along Maginhawa in Quezon City, and Le Village The Lifestyle Park along E. Rodriguez Ave. —VDS, GMA News