Food kiosk king Lester Yu is launching a 309 million peso initial public offering (IPO) for Balai ni Fruitas Inc. next month in a bid to challenge the country’s iconic bakeries.
Broom or Fruitas controlled by Fruitas Holdings Inc., a publicly traded Yu, raising funds to help expand its brand Broom Pandesal 200 stores by 2026 from 23 stores in September 2021. It also plans to build a bursar and gain potentially bakeries.
Balai ni Fruitas was established in 2005 and has since “become a reputable player in the Philippine food and beverage kiosk industry”, breaking away from other Fruitas Group names such as Sabroso Lechon and De Original Jamaican Pattie Shop and Juice Bar.
The company’s network in September last year spanned 69 stores through the brands Buko ni Fruitas, Fruitas House of Desserts and Balai Pandesal, which was acquired by Yu in June last year.
Based on its prospectus, Balai ni Fruitas will sell 325 million primary ordinary shares at an indicative price of up to P0.75 each to raise P243.75 million to fund its expansion plans.
Fruitas Holdings will sell 50 million shares (37.5 million pesos) while an option to sell an additional 37.5 million shares (28.1 million pesos) has been scheduled.
First Metro Investment Corp. will act as sole underwriter, issue manager and bookrunner for the IPO.
The IPO shares will be listed on March 8 while the general offer period will run from March 16-22. The company aims to start trading on the Philippine Stock Exchange on March 30 this year.
Broom or Fruitas said the “vast majority” of the expansion would focus on Broom Pandesal.
It also meant the budding bakery would go up against established names such as Pan De Manila and Julie’s Bakeshop, which control more than 90% of the market by revenue, according to the IPO prospectus.
The company sees a “good opportunity” in the segment given the high demand for bread, especially in Metro Manila, whose population consumes an average of 254 pieces of pandesal per year, according to the prospectus.
“In addition, consumer preference for bread as a rice substitute can contribute to consumption growth in this category,” noted broom or Fruitas.
It posted a net profit of 2.28 million pesos in September, reversing a loss of 2.67 million pesos the previous year.
—Miguel R. Camus
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