Metro Retail taps P1-B UnionBank credit line

Super Metro in Colon Street is one of Metro Retail’s hypermarkets. Other retail formats are department store, supermarket and neighborhood store.

Newly listed Cebu-based retailer Metro Retail Stores Group, Inc. is set to take out a P1.05-billion loan from the Union Bank of the Philippines.

In its regular board meeting last Thursday, the board of directors passed a resolution authorizing the company to apply for and avail of the loan offered by UnionBank.

“That new line is a back-up working capital line. We have existing credit lines as well,” said Joseph Conrad M. Balatbat, investor relations head of Metro Retail, in a text message to Cebu Daily News yesterday.

The move is in line with the statement of Metro Retail chief executive officer Frank Gaisano in November that the company’s expansion will be supported by available credit facilities.

Gaisano, in an interview after the investment road show in Cebu on the company’s initial public offering (IPO) , said they were “still very much under-leveraged.”

Metro Retail, the fourth largest retailer in the country, plans to open 50 to 70 new stores in the next five years.

This would bring the company’s network to more than 100 stores, including the existing 46 stores, and double its footprint from the current 400,000 square meters.

For next year, Metro plans to open two more stores in Cebu – one in the north and another in the south.

The company has also programmed four other stores, which will anchor Ayala developments, and one store that will open within the Megaworld mixed-use complex in Iloilo.

Metro Retail also plans to acquire more neighborhood stores that will be rebranded as Metro Fresh N Easy.

The company said it will tap available credit facilities after its maiden stock offering on November 24 generated only P3.6 billion instead of P6 billion as targeted originally.

Metro shares were offered at P3.99 apiece, a discount of about 34 percent from the original offer price of P6 due to market volatility. Metro shares closed at P3.73 last Friday.

Metro Retail is the first Gaisano-owned company and the first homegrown retailer from Cebu to go public, with the aim of improving margins and operating efficiency.