Fruitas subsidiary to file for PhP309 million IPO

Balai ni Fruitas, Inc. (BALAI), a wholly-owned subsidiary of publicly-listed Fruitas Holdings, Inc. (FRUIT), is set to file a registration statement with the Securities and Exchange Commission (SEC) for a potential PhP309 million initial public offering (IPO) as per a press release by FRUIT yesterday. The company hopes to list on the PSE’s SME Board by the first quarter of 2022.

BALAI, previously Buko Ni Fruitas, Inc., was incorporated in May 2005 and operates some of FRUIT’s most recognizable brands such as Buko Ni Fruitas, Fruitas House of Desserts, and Balai Pandesal.

BALAI managed to increase the number of Balai Pandesal outlets from 5 in June 2021 to 23 by September 2021. The company hopes to expand its Balai Pandesal store network to over 100 locations by end 2022 and 150 by end 2023. Furthermore, as of September 2021, BALAI boasts a combined 46 Buko Ni Fruitas and Fruitas House of Desserts outlets.

“We evaluated several capital-raising options to fund the next phase of growth of BALAI. Given the significant growth prospects of the bakery sector, distinct from the kiosks within Fruitas Holdings, we decided to undertake an IPO for BALAI,” said Mr. Lester Yu, Chief Executive Officer and President of FRUIT and BALAI.

As per Mr. Yu, the primary proceeds of the planned IPO would be used to expand BALAI’s store network to major Philippine cities and establish its own commissary to serve more customers. Part of the proceeds may also be utilized to potentially acquire other baked goods to broaden the company’s product offerings.

The planned IPO announcement comes after a recent streak of aggressive expansion by FRUIT in a bid to strengthen its long-term prospects. Although a technically smaller offering, BALAI’s recent rate of expansion may suggest relatively faster growth compared to FRUIT especially in the years to come.

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