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D&L eyes up to P5-B maiden bond offering

D&L Industries, a listed manufacturer of specialty food ingredients, plastics, and oleochemicals, plans to raise P3 billion to P5 billion through the issuance of bonds this year.

In a statement yesterday, the company said it secured approval from its board of directors for a maiden offering of bonds with a tenure of three to five years.

Final details of the issuance, including interest rates, will be finalized together with the company’s underwriters.

“With interest rates still remaining low, we believe it’s an opportune time to tap the debt market. Our 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 chief executive officer Alvin Lao.

The proceeds from the bond issuance will primarily be used to finance its expansion plans in Batangas which involves total estimated capital expenditures (capex) of P8 billion and the corresponding working capital requirements.

Construction started in late 2018 and completion is expected by the end of the year. The remaining capex to be deployed for the project is about P4 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.*

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