MANILA, Philippines - JG Summit Holdings Inc., the flagship of the Gokongwei Group of Companies, is reportedly planning to tap the debt market with the issuance of between P5 billion and P10 billion worth of bonds.
Sources privy to the proposed transaction said the bonds will be issued within the year and will have a maturity of five years.
Proceeds from the sale could be used to fund corporate requirements, the same source said.
JG Summit has earmarked P28 billion for its capital outlays this year to support the continued expansion of its four core businesses, most of which will go to its telecommunications and property units.
Around P12 billion has been set aside for the expansion of its mobile and broadband networks under unit Digital Telecommunications Philippines Inc. (Digitel).
About P7 billion will be channeled to its real estate unit Robinsons Land Inc., which is building new shopping malls, residential units, office buildings, and a chain of budget hotels in and outside Metro Manila.
The group’s airline business under Cebu Pacific will get P5 billion out of the total groupwide capital budget to boost its fleet expansion. Plans include the acquisition of 15 additional aircraft over a four or five-year period beginning 2010. The company also has an option to acquire five more planes.
For its food business, Universal Robina Corp. (URC) will spend around P3 billion this year to expand its snackfood and beverages businesses in the country and and East Asia. The group is building a facility for its C2 ready-to-drink tea in Indonesia, its second in Asia. It also plans to beef up the production capacity of its cookie line in Thailand.
Around P100 million will go to the group’s petrochemicals business and the balance of P900 million will be used for other corporate purposes.
The 2009 capex is 16 percent lower than the previous year which included the expansion of its sugar milling business.
JG Summit expects 2009 to be its banner year, taking out non-recurring gains. Revenues are forecast to grow 15 percent to 20 percent this year with EBITDA reaching P29 billion to P30 billion from P25 billion in 2008. – Zinnia dela Peña