HAGL cancels bond listing in Singapore
HAGL cancels bond listing in Singapore
Hoang Anh Gia Lai (HAGL) said it had applied for delisting bonds worth $90 million on the Singapore Exchange. The listing cancellation is effective from August 15.
HAGL attributed this move to the small number of bond-holders and the low volume of transactions made. Bondholders are mainly banks and investment funds in Singapore.
The cancellation will help HAGL reduce the cost for maintaining listing and monitoring bonds.
HAGL international bonds with an interest rate of 9.875 pct were issued in 2011 and will fall due in 2016. HAGL originally intended to use the funds raised from this debt sale to finance hydropower and rubber projects as well as supplement the group’s working capital.
According to HAGL deputy general director Vo Truong Son, canceling international bond listing and restructuring bank debt via bond issuance at home are part of the plan for cost reduction and better management of cash flow in the current tough times.
Son said HAGL business performance will prosper in this year’s end and next year when rubber, hydropower and sugar sectors begin to generate revenues.
In a related development, HAGL announced it had successfully issued VND850 billion worth of bonds last Friday, with an aim to restructure its bank debt.
The bond carries a term of three years and has a par value of VND1 billion. Its coupon is 16% in the first year while that in the next two years equals to the average deposit rate for the 12-month term determined by Vietcombank, VietinBank, BIDV and Agribank in Gia Lai Province, plus a margin of 5% per year.
The bond yield will be paid every six months. BIDV and BIDV Securities Company arrange the bond sale, with buyers being creditors of HAGL.
HAGL deputy general director Vo Truong Son said this bond issue was not aimed at raising more funds but turning the short-term debt HAGL owed to banks into corporate bonds, helping the group extend the repayment period.
According to a financial statement of HAGL, the liabilities of the group had amounted to more than VND10.8 trillion as of end-June, including over VND3.8 trillion of short-term debt, mainly corporate bonds and convertible bonds.
Short-term and long-term bank debt totaled VND718 billion. After-tax profits of HAGL totaled VND49 billion, down 70% year-on-year, mainly due to high loan interest.
On July 20, the credit rating agency Standard & Poor’s (S&P) announced its rating for HAGL at B-, unchanged from the previous ranking, saying the firm’s liquidity remained poor. However, HAGL board stated the group was not facing liquidity pressure as HAGL would gain big revenues from now to the year’s end according to its schedule, saying that S&P had not updated the business situation.
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