The plan of listed food ingredients and chemicals maker D&L Industries Inc. to raise P5 billion from its maiden bond issuance has secured the thumbs up from the Securities and Exchange Commission (SEC).
The SEC green light was secured on August 26, D&L Industries said in a regulatory filing to the Philippine Stock Exchange on Friday.
The company plans to issue a base offer of up to P3 billion with an oversubscription option of up to P2 billion with a tenor of three and/or five years.
The offer period will run from September 1 to September 6, 2021, while issue and settlement date will be on September 10, 2021, it said.
Philratings rated the bonds PRS Aaa with a stable outlook, the highest rating assigned by the agency.
D&L tapped Chinabank Capital as the sole issue manager, lead underwriter, and sole bookrunner.
The proceeds from the bond issuance will primarily be used to finance the company’s expansion plans in Batangas and the corresponding working capital requirements, the company said.
Construction started in late 2018 and commercial operations are expected to partially commence in May 2022.
Total estimated capex for the said facility amounts to P8 billion.
Remaining capex to be spent stands at about P3.5 billion.
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.
“We believe that it’s an opportune time to tap the debt market with interest rates still remaining low. This 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,” D&L president and CEO Alvin Lao said.
“We are delighted to share that our bond offering was rated PRS Aaa with Stable Outlook by Philratings, which, in our view, validates the strong prospects of our business,” he added.—LDF, GMA News