Tanduay brewing up capital
Tanduay joins fund-raising bandwagon
Companies
Wednesday, 25 November 2009 18:50
LIQUOR firm Tanduay Distillers Inc. announced on Wednesday that it plans to sell P5 billion worth of retail bonds to fund spending activities and to refinance maturing obligations.
In a filing to the stock exchange, parent company Tanduay Holdings Inc. said the 5-year fixed-rate bonds will be registered with the Securities and Exchange Commission. Both companies are owned by business tycoon Lucio Tan.
First Metro Investment Corp. and PNB Capital and Investment Corp. have been selected as joint issue managers for the offering. Sister-company Allied Banking Corp. has also been appointed as joint lead manager.
The Credit Rating and Investors Services Philippines Inc. has already assigned the highest rating or “Aaa” to the proposed issuance, which indicates a strong capacity and low probability of default by the issuer.
Tanduay Holdings said the rating agency considered the company’s brand equity and healthy financial performance, indicated by its strong gross margin and net income margin averaging 21.4 percent and 10.6 percent, respectively, for the last five years.
For the third quarter, Tanduay Holdings said net income rose 12.44 percent to P197.18 million. This brings the company’s net income for the first nine months to P499.44 million, up 6.53 percent from the same period last year.
Consolidated revenues were also up 6 percent to P7.5 billion. The 6-percent increase in selling price in January this year allowed the firm to post higher earnings, despite a slight drop in sales volume.
The production facility in Cagayan de Oro, Misamis Oriental also made a positive contribution in meeting the higher demand in the Mindanao region, which accounts for almost half or 42 percent of the total sales volume.
Earlier, Tanduay Holdings said it will spend P500 million to expand the production capacity of one of its plant in Negros Occidental.
The 155-year-old firm is considered the second-largest producer of rum in the world through its flagship product Tanduay Five-Year Rum. The holding company operates four bottling plants and two alcohol distilleries across the country.
Other subsidiaries of Tanduay Holdings include Tanduay Brands International Inc. and Unimark Investments Corp.