Chemical manufacturer D&L Industries Inc. on Wednesday filed its registration statement with regulators for the maiden sale of its P5 billion three-year and five-year bonds, which it will offer in the third quarter.
The company’s bond float consist of P3 billion in base offer and an oversubscription option of P2 billion.
The bonds may be offered in series A bonds due in 2024 and series b bonds due in 2026.
China Bank Capital Corp. has been mandated as its sole issue manager, lead underwriter and sole bookrunner.
The bonds shall be issued in scripless form and in denominations of P50,000 each, as a minimum, and in integral multiples of P10,000 thereafter, and traded in denominations of P10,000.00 in the secondary market.
The bonds will be listed on the Philippine Dealing and Exchange Corp.
According to its initial schedule, rate setting is on August 18, public offer period is from August 24 to 31, and listing date is on September 7.
Proceeds of the bonds will be used to pay for the loans it obtained for its new facility in Batangas.
“Capital expenditures [capex] related to the Batangas expansion project has been ongoing since the past year. Prior to the offer, the company funded the project costs through bridge financing of short term loans from its partner banks. D&L intends to repay these bridge loans from the proceeds of the offer,” the company said.
“It’s more conservative to have some debt long term considering we have some long term assets that we have to finance like the construction in Batangas plant. So that’s why issuing the bond seems to make more sense (that doing a preferred share sale or private placement),” Alvin Lao, the company’s president and CEO, said. Construction for the expanded factory of the company, which started in late 2018, is expected to to be completed this year.
However, Lao said there may be delays partly as a result of the stricter lockdowns that the government implemented when Covid-19 cases surged in March to April.
“There’s possible delays in the tightness of the supply chain around the world and also in the shipments (of cargo). We’re still assessing the full impact.”
Remaining capex to be deployed for the project is about P4 billion, the company said earlier.