MANUFACTURING D&L Industries, Inc. has said its management board authorized a scheme for the financing of the expansion plans of the group in Batangas, with fixed-rate bond called peso worth up to $5 billion.
When the business declared its acceptance at the exchange on Tuesday, the Board of Trustees fixed the key sum of the bid at P3 billion with a choice of surplus subscription of up to P2 billion. The bonds will be kept for 3 to 5 years.
“It’s also a decent opportunity to tap the loan sector with low interest rates. Our maiden bond issuance would be of benefit to the Group in the financial sector and will help us to flexibly exploit the possibilities for the future,” said D&L CEO Alvin D. Lao, in a release.
The bid is subject to the conditions of the SEC, the Philippine Dealing and Exchange Corp. and other regulatory agencies.
D&L said that after the deal was finalized, it will publish more information.
The Batangas plant of the group has an approximate amount of P8 billion in capital. Construction started in late 2018 with about P4 billion to be deployed. It is anticipated for the end of the year to finish.
This plant is used for the food export and oleochemical sectors of the business. That would also make it possible for the firm to produce packaging downstream.
“The new plants, for instance, would enable the business to ‘load at source’ while mostly selling raw materials to bulk consumers. D&L would then be able to refine and stack the raw materials similar to finished goods for a consumers-faced look,” said D&L.
“This will allow D&L to get custom solutions closer to its customers and make the supply chain simpler, which in view of global logistics difficulties and issues is of great importance,” added the firm.
D&L aims to focus on foreign markets, and to produce further coconut related goods. The facility is expected to improve the development of D&L.
“We think the company continues to have good potential growth opportunities, and hope our new facility comes up before the year end,” said Mr. Lao.
“The resilience shown last year by this group underlines the relevance and the organizational appropriateness of our sector to the core sectors as we have never seen our net revenues transform negatively except at the height of the lockout,” he said.
During the first quarter of 2020, the business produced P515 million, second quarter P287 million, third quarter P573 million and last quarter P637 million.
The company’s profits rose in the fourth quarter by 8% compared with the 2019 figure of P590 million. The group also claimed that it “means the turning point of profit development.”
For the year, D&L’s net profits was P2,01 billion, down 23 percent of 2019’s net revenue of P2,62 billion.
“I hope the worst is done and the restoration of the market is in a really strong position while the sector starts to reopen.”