SL Agritech plans P5-B fund raising

MANILA, Philippines — SL Agritech Corp., the largest producer of hybrid rice and seeds in the country, plans to raise as much as P5 billion in the first semester to fund its continued expansion program.

“We will be issuing another P2 billion short-term commercial papers then another P3 billion in preferred shares,” SL Agritech chairman and chief executive officer Henry Lim said.

Lim said the commercial papers would be issued this quarter while the preferred shares would be issued in the second quarter.

SL Agritech  was assigned an issuer rating of PRS Aa with a positive outlook by local credit watchdog Philippine Rating Services Corp. A company rated PRS Aa differs from the highest-rated corporates only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.

PhilRatings took into account SL Agritech’s market position as the frontrunner in hybrid rice technology in the Philippines, its sustained high-growth trajectory, with profitability margins expected to improve going forward, strong shareholder support, and the potential upside given a favorable regulatory environment, complemented by its international business expansion.

Meanwhile, Lim said SL Agritech might just post over P500 million in earnings this year, short of its income goal of P700 million.

“Definitely, we will be surpassing last year’s earnings  but we’re not sure if we can reach P700 million,” Lim said.

The DA originally planned to expand areas planted with hybrid rice seeds to up to one million hectares but it also slashed its target areas to about half or just around 500,000 to 600,000 hectares due to lower budget.

SL Agritech produces the Dona Maria brand of premium rice in Miponica and Jasponica varieties.

It holds 80 percent of the total market share of hybrid variety in the Philippines.

The company has various partnerships for hybrid rice seed production in Asian nations such as India, Vietnam, Bangladesh, Indonesia and Cambodia.