October 27, 2021

SEC approves D&Ls P5-B bond offering – Manila Bulletin

https://mb.com.ph/2021/08/27/sec-approves-ds-p5-b-bond-offering/

The Securities and Exchange Commission (SEC) has approved the planned public offering by D&L Industries, Inc. of fixed-rate bonds worth up to P5 billion.

In its meeting on August 26, the Commission En Banc resolved to render effective the registration statement of D&L covering up to P3 billion of Series A bonds due in 2024 and Series B bonds due in 2026, with an oversubscription option of up to P2 billion, subject to certain remaining requirements.

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D&L expects to net up to P4.93 billion from the offer, assuming the oversubscription option is fully exercised.

The proceeds will be used to finance the expansion of the food and plastic manufacturer’s plant in Batangas, as well as for the partial repayment of bridge loans.

The bonds will be offered at face value, and will be listed and traded on the Philippine Dealing & Exchange Corporation. (PDEx).

The offer is scheduled for September 1 to 6, with listing on the PDEx slated for September 10, according to the latest timetable submitted to the SEC.

D&L tapped China Bank Capital Corporation as the sole issue manager, lead underwriter, and sole bookrunner for the offer.

The firm said capital expenditures related to its P8 billion Batangas expansion project has been ongoing since last year. Prior to the bond offer, the Company funded the project costs through bridge financing of short-term loans from its partner banks.

D&L Industries President Alvin D. Lao

“With interest rates still remaining low, we believe it’s an opportune time to tap the debt market. Our maiden bond offering will be a useful financial exercise for the company and will allow flexibility for future opportunities we can potentially take advantage of,” said D&L President and CEO Alvin Lao.

Once completed, the new plant will be instrumental to the company’s future growth, in line with plans to develop more high value-added coconut-based products and penetrate new international markets.

It will mainly cater to D&L’s growing export business in the food and oleochemicals segment. It will add the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain.

For instance, while the company primarily sells raw materials to customers in bulk, the new plants will allow it to “pack at source.” This means that D&L will have the ability to process the raw materials and package them closer to finished consumer-facing products.

This will enable D&L to move a step closer to its customers by providing customized solutions and simplifying their supply chain, which is of high importance given global logistical challenges and concerns.


 

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