Indorama readies B15bn in debentures, eyes sustainability

Indorama Ventures Plc plans to issue 15 billion baht in subordinated perpetual debentures.

In September, Tris Ratings assigned an AA- company rating to IVL with a stable outlook and an issue rating of A with a stable outlook for the proposed subordinated perpetual debentures.

The issuance will have a coupon of 5% a year paid quarterly, compared with the current policy rate of 1.50% and government bond yields of 1.40% for five years and 1.49% for 10 years.

The company has appointed Bangkok Bank, Krungthai Bank, Kasikornbank and Siam Commercial Bank to manage the sale of the debentures to investors during the subscription period of Nov 4 to 7.

IVL ranked 35th among global chemical companies based on total sales in 2018, according to Chemical Week, an industry publication.

From 2014 to 2019, IVL increased the number of manufacturing sites to 101 in 31 countries in Asia, North America, Europe, South America and Africa.

During the period, product diversification led to more value-added products and necessity products with increased intellectual property in the form of brands, patents, trademarks and production technologies.

“To keep pace with the growth and diversification, the management bandwidth has been expanded at the corporate office, regional offices and business segments,” said Aloke Lohia, group chief executive of IVL. “The strategic direction and prudent growth initiatives taken in the last five years have resulted in multiple revenue streams and cash flow streams which will lead to longterm sustainable growth.”

“IVL has strengthened its business and financial profile over the last five years in integrated world class operations spread geographically in all major consumption markets,” said chief financial officer Sanjay Ahuja. “Our diversity and leadership position has earned us our investment-grade rating, and we have been able to appropriately leverage this strength.”

IVL reported sales of 376 billion baht in the 12 months to June 30, 2019, with core earnings before interest, tax, depreciation and amortisation of 45 billion baht, a core net profit of 21 billion baht and cash flow from operations of 38 billion baht.

The company’s financial position has been strengthened by an increase in cash flow from operations and the raising of 31 billion baht in cash equity from the exercise of warrants from 2017-18.