D&L Industries Gets SEC Okay On P3B Bond Float
D&L Industries has secured approval from the Securities and Exchange Commission (SEC) for its maiden bond offering.
Photo Insert: D&L Industries flag expansion in Batangas
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 3 and/or 5 years. The offer period will run from September 1 to September 6, 2021, while the issue and settlement date will be on September 10, 2021.
Philratings rated the bonds PRS Aaa with 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.
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. The 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. 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 its supply chain, which is of high importance given global logistical challenges and concerns.
"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.,” remarked President and CEO Alvin Lao.