Hoang Anh Gia Lai Joint Stock Company (HOSE: HAG) has raised $90 million from successful bond issuance in the Singaporean market for its new hydropower and rubber plantation projects in Vietnam and Laos.


The 5-year bonds, which were issued in US dollar in the Singaporean market, will have the coupon rate of 9.875 percent per annum and the yield will be paid semi-annual starting from November 20, 2011 and ending on May 20, 2016, Vo Truong Son, HAG's Deputy General Director told Thoi Bao Kinh Te Sai Gon Newspaper.
As for the debt repayment period, Son said HAG will pay 20 percent in the third year, another 20 percent in the fourth year and 60 percent remaining in the fifth year. HAG still retains the right to buy the bonds after three years from the date of completing the issuance.
Credit Suisse (Singapore) will be the issuing book writer for HAG international bonds that are listed in the Singapore Stock Exchange. Saigon Securities Inc (SSI) is the domestic financial advisor in the bond issuance.
The plan to issue and list international bonds on the Singapore Stock Exchange was approved at the company's extraordinary shareholders' meeting in Ho Chi Minh City last December. At the meeting, most shareholders approved the plan to raise a maximum $200 million via international bond issuance in Singapore.
Doan Nguyen Duc, HAG’s Chairman, told the newspaper at this meeting that HAG seeks to mobilize international funds to ensure capital and progress for its investment projects partly because the company is difficult to find big loans, particularly long term loans in Vietnam.
HAG on May 29 signed a deal with Singapore-based Temasek Group for a $55 million investment in HAG's rubber sector.
Together with $55 million worth of convertible bonds that were issued last August, the total investment capital of Temasek into HAG will be up to $110 million.
Till June 6, HAG had a cash balance of VND3.4 trillion, plus $55 million from Temasek and will have VND4.55 trillion of cash, having enough capital for investments till 2012 despite the State Bank of Vietnam's tightened monetary policy.
HAG also earns huge incomes from real estate projects that have been sold such as An Tien, Phu Hoang Anh - Phase 1 and Hoang Anh River View.
According to the HAG’s combined fiscal report, till the end of Q1 2011, HAG had a debt of VND6.222 trillion, plus $90 million of bonds that were issued by late May (Equivalent to VND1.854 trillion) and minus the cash balance of VND3.4 trillion, HAG's net debt is now VND4.676 trillion, accounting for 52 percent of its equity (VND8.909 trillion) and 23 percent of the total assets (VND20.286 trillion).
Of the debt worth 6.222 trillion dong, HAG has 1.1 trillion dong of bonds being issued for Temasek and it is seeking approval from shareholders to extend the term of these bonds by two years.
By early 2012, HAG's hydropower sector would be financially autonomous and able to use the proceeds from its projects for loan repayment and investment into new hydropower plants.
HAG will also earn revenues from its rubber business from 2013.