SERC reviewing Royal Railway’s $10M bond issue proposal after CSX’s nod
SERC reviewing Royal Railway’s $10M bond issue proposal after CSX’s nod
The Securities and Exchange Regulator of Cambodia (SERC) is now reviewing Royal Railway Plc’s proposal to issue a bond worth about $10 million on the Cambodia Securities Exchange (CSX) to expand its business, after the bourse on September 7 gave the in-principle nod, confirming the company’s eligibility.
Royal Railway’s corporate bond will be the first issued on the CSX this year, and the company will be Royal Group of Companies Ltd’s second subsidiary to issue this type of debt security, after Telcotech Ltd, whose September 9, 2021 offering was worth 80 billion riel ($20 million).
“In order to be officially listed and have its securities traded on the CSX, Royal Railway shall get offering approval from the [SERC] and meet further listing requirements of the CSX,” the bourse said in a statement.
SERC director-general Sou Socheat confirmed to The Post on September 9 that the regulator is reviewing the bond issue proposal, and looking to meet with the Council of the Non-Banking Financial Services Authority for recommendations prior to making a final decision.
He declined to comment further, but said the SERC would provide updates after any meeting with the council.
On June 12, 2009, the Cambodian government granted a 30-year concession agreement to Toll (Cambodia) Co Ltd – a joint venture between Australian-owned Toll Holding Ltd and Royal Group – to manage the operations of the Kingdom’s railway system.
In 2014, however, Toll Holding transferred its 55 per cent stake in Toll Cambodia to Royal Group, which then changed the venture’s name to Royal Railway Cambodia.
Kim Sophanita, director of the CSX’s Market Operations Department, told The Post on September 8 that Royal Railway plans to issue a “long-term” KHR-denominated bond.
She explained that Royal Railway is “not a normal business but a strategic service” that aims to lower transportation costs, a mission she said would be a long-term investment that requires lots of capital, but is nonetheless a “key to promote economic growth”.
“I believe that [the] capital market is an ideal financing gateway for such [a] company to absorb the required capital from the public, who will all be using or benefiting from such service[s] in the future. The bond would [suit] investors who prefer a long-term fixed cash flow and [are] willing to accept a long-term risk.
“I hope there will be many investors interested in this bond investment, and participating in the upcoming roadshow to study about [the] issuing plan and company’s performance,” Sophanita said.
At present, a total of 16 companies feature on the CSX – seven companies have issued shares on the Main Board and two on the Growth Board – and seven corporations have listed their bonds.
