Century Properties Group, Inc. (CPG) is eyeing P6.4 billion worth of debt on top of its recently approved bond offering after the Securities and Exchange Commission (SEC) asked the listed firm where it will source the rest of the funds for its capital spending.
In the recent commission en banc, SEC finally approved the planned P3-billion bond offering of CPG after the fundraising activity has been deferred during the previous commission’s meeting.
SEC initially deferred the bond offer to ask the listed real еstatе company for additional information such as where would the latter get the additional funding for its P12.8-billion capital expenditure requirement for this year up to 2017.
CPG explained in its latest filing with the SEC that it can utilize additional credit facilities to bankroll the rest of its capex needs.
“At an assumed loan to cost ratio of 50 percent, the company or its subsidiaries can generate additional P6.4 billion of credit facilities based on a total capital expenditure budget of P12.8 billion,” CPG told the Commission.
The group also mentioned that it just secured the approval for a P1.3-billion subordinated secured loan for Century Spire, its project in Makati, to partly fund the capital expenditures for the project.
“While the Company believes that the Bond, the collections from residential units of its six projects, and additional credit facilities are already sufficient to complete the capital expenditures required, to the extent more funding is required, the Company is expected to generate internally generated free cash from 17 projects that the Bond is not financing, and are all projected to be completed by 2016,” CPG further said.
Specifically, CPG is planning to raise P2 billion worth of Unsecured Fixed Rate Peso Retail Bonds, with an oversubscription option of P1 billion.
The proceeds to be raised via this offering, according to CPG, will be used for its capital expenditure requirements for the remainder of 2014, 2015 and 2016.
“To complete the capital expenditure requirement for our projects, the company requires additional P8.4 billion from 2017 to 2019 bringing the total remaining capital expenditures to P12.8 billion,” CPG earlier said.
BDO Capital & Investment Corp was tapped as issue manager, with HSBC as joint underwriters and bookrunners, while Primeiro Partners is the financial advisor on the transaction. The bonds will be listed on the Philippine Dealing and Exchange Corp.
The company announced the aforementioned fund-raising in June.
Source: Manila Bulletin | August 16, 2014