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Banking & Finance

TTC Sugar to issue convertible bonds

Released at: 09:52, 27/08/2019

TTC Sugar to issue convertible bonds

Photo: SBT

Sugar producer to issue bonds and add new business lines.

by Hung Cao

The Thanh Thanh Cong - Bien Hoa JSC (TTC Sugar, Stock code: SBT) last week published documents to collect written opinions from shareholders on approving a supplementation of its business lines, the issuance of convertible bonds, the buyback of convertible dividend preference shares (CPS), and amendments and supplements to its Company Charter.

With 24 years in agricultural mechanization, applying the latest science and technologies into production, combined with its advantages in the agricultural machinery business and a broad raw material area of nearly 70,000 ha in three Indochina countries, SBT’s Management Board has oriented towards boosting a high-tech, clean agricultural chain to optimize revenue and profits.

The company plans to add eleven new business lines, mainly in the field of animal husbandry and the cultivation of other crops besides sugarcane, thereby increasing its total number of business lines to 42. To diversify revenue sources, the company expects to increase the proportion of by-products, significantly adding to the proportion of products in the agricultural chain to meet sustainable development goals.

It is expected that by FY2020-2021, the revenue structure of by-products will increase and account for 30 per cent of total revenue compared to 15 per cent in FY2018-2019. By-products include molasses, microbial fertilizer, biomass energy, and others.

SBT is in the process of negotiating to cooperate with several large corporations in Asia in the field of cultivation and animal husbandry to increase its profits.

SBT submitted the plan to shareholders for a private placement of convertible bonds in Vietnam dong to restructure its financing. By reducing short-term debt and restructuring capital safely in the long-term, the company aims to ensure stable financial resources and satisfy the rigorous requirements of strategic investors who have purchased its shares.

It plans to issue 2,400 convertible bonds with a par value of around $43,100 each and with a minimum duration of three years. The interest rate will be negotiated specifically with investors. It is expected to collect $103.4 million after completing issuance. The convertible bonds can be converted, in part or in whole, into common shares after one year from the issuance date.

Finding and cooperating with strategic investors is one of the most important parts of the company’s development strategy. It proposed amendments and supplements to the Company Charter as well as the buyback CPS, which is a preparatory step for cooperating with long-term investors to assist the company in capital planning and management as well as business operations, especially with ATIGA about to come into effect.

Besides revenue from 152MW of biomass power, SBT also continued to expand its investment in this area through the purchase of shares in the Gia Lai Electricity JSC (GEC), which has a diverse portfolio of hydropower and solar power projects. Anticipating renewable energy development has been promoted by GEC recently, and through owning GEC shares, it is diversifying its energy investment portfolio.

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