SL Agritech raises P1B via STCP issue

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HYBRID rice producer SL Agritech Corp. (SLAC) said it raised P1 billion from the issuance of short-term commercial paper (STCP), proceeds of which will be used to finance operational expansion and beef up working capital.

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Henry Lim Bon Liong, SLAC chairman and chief executive officer, said they closed the five-day offer period earlier than scheduled due to oversubscription.

“The issuance was oversubscribed. Investors sought short-term investment instruments that are tradable and highly rated,” Lim said in a statement.

“The oversubscription on SLAC’s first SEC-registered public offer of securities indicates the amount of investor confidence in SL Agritech. The STCP issue helps secure SLAC’s position as the number one hybrid rice seed provider in the Philippines,” he added.

The commercial paper carries an interest rate (base rate and credit spread) of 4.5 percent for Series A, 4.75 percent for Series B, and 5.25 percent for Series C. Series A and B are denominated in P5 million lot sizes with increments of P100,000; while Series C in P500,000 lot sizes with increments of P100,000.

Lim said the STCPs are to be listed on the Philippine Dealing & Exchange for secondary trading upon its issue date on January 22.

SLAC is known for its Dona Maria premium brown and white rice – Miponica for sticky rice used in sushi, and the Jasponica for the aromatic Jasmine-Japonica rice type.

While dominating the local market with its premium hybrid lines, the company also exports to the United States, Kuwait, Hong Kong, Germany, Macau, Canada, and the Netherlands.

For its long-term plan, SLAC expects the distribution of Doña Maria rice to reach other Asian and Middle East markets, including Qatar, Saudi Arabia, China, and Indonesia.

In October 2015, the company signed an agreement with Myanmar’s agriculture ministry to extend technical aid and bring superior rice variety technology to Naypyidaw. It has also cornered a marketing deal for the rice to be produced in that Southeast Asian nation.

Also, following its venture in Papua New Guinea (PNG), SLAC is now exploring the possibility of expanding its palay production to the Pacific islands Samoa, Fiji, Solomon Island and Africa’s Mozambique.

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