Bangkok--5 Jun--TUF
Thai Union Frozen Products Public Company Limited (TUF), Thailand's major processor and exporter of canned and frozen seafood, has successfully launched its first Thai baht bond worth Bt 3.2 billion with the coupon rate at 3.91% despite the deteriorating outlook of the local economy. The bond is highly ranked with A+ rating, demonstrating the strength of the company and strong confidence by institutional investors.
Thiraphong Chansiri, president of TUF, explained, “This is our first ever bond issue with HSBC acting as our arranger of the offer to local institutional investors. Our bond received very positive responses from institutional investors, namely mutual funds, provident funds and insurers. The issue size was originally set at Bt 2.5 billion (2.5 million units with a par value of Bt 1,000 per unit). However, it turned out that the bond was 2 times over-subscribed, allowing us to exercise the green shoe option of expanding the issue size to Bt 3.2 billion. The bond is of 4 year maturity with the coupon rate of 3.91 %.”
“The proceeds from the bond issue will be used for refinancing some of our existing debts which are paying higher interest rates at the moment. This exercise will help reduce our overall cost of debts by at least 70 basis points. Although we always emphasize efficient cost management when running our business, the main objective this year would be reducing interest costs and other expenses,” he added.
The bond issue has been ranked by the Thai Rating and Information Services Co., Ltd. (TRIS) with A+ rating (Stable Outlook). The rating proves the firm’s strength as a leading processor and exporter of canned and frozen seafood and also endorses its efficient management and global competitiveness.
Earlier, the firm has just released its Q1/2007 operating results which showed continual growth in sales and profitability. Sale revenues in US dollar term were up by 3% from USD 350.5 million in Q1/2006 to USD 361.6 million. Net earnings surged to Bt 527.7 million, representing a growth rate of 27% against the same period last year. This achievement was mainly thanks to proactive cost-saving and expense-reduction efforts which started since last year. Besides increased profitability, the firm’s financial position also improved when its debt-to-equity ratio dropped to 0.61 times in Q1/2007 from 0.66 times in Q4/2006.