MANILA, Philippines - Universal Robina Corp. (URC), the food and beverage unit of Gokongwei listed flagship firm JG Summit Holdings Inc., will issue P3 billion worth of fixed-rate notes through a private placement.
In a disclosure to the Philippine Stock Exchange, URC said the notes, which will be issued to no more than 19 primarily institutional lenders, will have a term of five years and one day.
Proceeds from the issue will be used for capital expenditures and general corporate purposes.
The company has appointed HSBC as lead manager and SB Capital Investment Corp. as co-manager for the placement, distribution and sale of the notes.
URC has set aside P3.87 billion for its continued expansion program, including maintenance capital expenditures this year.
Bulk of the capital budget, or P2.705 billion, will be used to beef up its local snack production facilities and beverage production lines in Thailand and Vietnam.
Around P520 million will go to the continued expansion of its sugar milling operations while P365 million will go to the agro-industrial group consisting mainly of farm expansion and bulk handling facility for feeds division.
“No assurance can be given that the company’s capital expenditures plan will not change or that the amount of capital expenditures for any project or as a whole will not change in future years from current expectations,” URC said.
Last year, URC spent P4.74 billion for the acquisition the of Granny Goose snack line and Passi sugar mills, the expansion of Sondeco mills in Negros and beverage lines in Indonesia and Vietnam.
In the first quarter of its fiscal year ending September 2009, URC incurred a net loss of P245.69 million, a reversal of the P244.17 million net income reported a year earlier as foreign exchange and mark-to-market losses swelled.
The 122-percent growth in revenues to P13.27 billion was offset by the drop in bond prices worldwide stemming from the current financial turmoil.
Foreign exchange losses amounted to P119.29 million or more than seven times the previous level while finance costs jumped 42.2 percent to P526.91 million. Cost of sales grew 25 percent to P10.27 billion while general and administrative expenses went up 18 percent to P456.26 million.