Del Monte Pacific said yesterday that it would delay the initial public offering of its Philippine unit, citing volatile market conditions.

It said in February that it would offer about 559.5 million shares, representing 20 per cent of Del Monte Philippines Inc's (DMPI) current number of ordinary shares. The estimated maximum offering price will be 29.88 pesos per DMPI share.

"The company had secured the necessary approvals from the Securities Exchange Commission, the Philippine Stock Exchange Inc and the company's shareholders at a meeting held on June 1, 2018," Del Monte Pacific said in a regulatory filing yesterday.

"However, market conditions continue to be volatile and the company has been advised by its bankers and advisers that it would be in the best interest of the company and DMPI to defer the offering until such time when market conditions improve."

DMPI produces and sells food and beverage products in the Philippines under the Del Monte brand, and exports these products under the S&W brand and private label.

Two-thirds of its revenue come from the Philippines, while one-third comes from exports.

Del Monte Pacific said proceeds will allow it to prepay some loans, allowing it to deleverage and strengthen its balance sheet. Such prepayment is allowed under the current loan facility agreement without any fee or penalty.

The proposed public offering will also result in a one-time gain of about US$304 million (S$405 million) for the group, assuming that DMPI raises net maximum proceeds of US$314 million.

As of Oct 31 last year, the net book value of 20 per cent of DMPI is $93.9 million.