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Textile maker Sritex raises $150m from global bonds issuance
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Sritex workers carry out activities at the company's factory in Sukoharjo, Surakarta, Central Java. (JP/Nani Afrida)
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ublicly listed textile maker PT Sri Rejeki Isman or Sritex raised US$150 million from a recent senior note global bonds issuance that was six times oversubscribed.
"We did not upscale the amount although it was six times oversubscribed because that's all the funds we needed at the time," Sritex corporate secretary Welly Salam wrote in an official statement.
The debt papers, which are issued by Sritex's Singapore-based subsidiary Golden Legacy Pte. Ltd., have a coupon rate of 6.87 percent and tenure of seven years. The senior notes issuance is a part of Sritex's bonds that will mature in March 2024.
(Read also: Textile maker Sritex booked $59.36 million in net profit last year)
The firm acts as the parent guarantor of the Singaporean company and together with another subsidiary, PT Sinar Pantja Djaja, fully guarantee the bonds.
Golden Legacy will use the funds to refinance its global bonds worth $89.3 million, maturing in 2019, while Sritex will use the funds to repay its medium term notes (MTN) worth $30 million due in October, for working capital loan repayment and any remaining proceeds for general corporate purposes to support the business of the company.
Such a measure is expected to push down the firm's average loan costs and eventually improving its net profit.
"We will continue to focus on improving our liquidity and capital structure," Sritex finance director Allan Moran Severino said.
Sritex booked a 6.6 percent net profit growth to $59.36 million last year while its net sales increased 9.3 percent to $679.94 million. (bbn)
