Alsons secures SEC approval to sell P3B worth of commercial papers
MANILA, Philippines — The Alcantara Group’s Alsons Consolidated Resources Inc. (ACR) has secured the regulatory approval to sell P3 billion commercial papers to sustain its business operations.
In a disclosure on Monday, ACR said the Securities and Exchange Commission (SEC) approved the sale of up to P1.6 billion worth of commercial papers, a short-term debt instrument issued by companies to raise capital quickly.
The offer was set at P1.2 billion, with the listed firm planning to sell up to P400 million in case of an oversubscription. It represents the first tranche of ACR’s P3 billion commercial paper program.
READ: Mindanao power demand boosts Alsons’ 2023 income
Proceeds from this transaction will be used to refinance its maturing short-term obligations and support working capital.
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As stated in the firm’s prospectus, ACR plans to use the funds to cover disbursements related to upcoming projects, including feasibility studies, environmental assessments and governance evaluations.
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“These preparations are crucial for ensuring that each project is well-planned, compliant with regulations, and aligned with long-term sustainability and operational goals,” it said.
ACR also said that although some of its short-term obligations will mature before the target issue date, these “will be rolled over and will be payable on their new maturity date subsequent to the issue date.”
The commercial papers, which will be offered at discount to face value, will be listed at the Philippine Dealing & Exchange Corp.
The first tranche will have the following tenors or the length of time until the debt security matures: 182 days and 364 days which will carry discount rates of 6.9444 percent and 7.6906 percent, respectively.
RBBC Capital Corp. is the issue manager, lead underwriter and bookrunner for the transaction while MIB Capital Corp. is the arranger.
The Philippine Ratings Services Corp. (PhilRatings) assigned a credit rating of Aa minus with a stable outlook on ACR’s commercial paper program.
“A company rated PRS Aa (corp.) 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 also included a minus (-) sign to further qualify the rating,” the local debt watchdog explained.
On the other hand, a stable outlook is assigned when a rating is likely to be maintained and or to remain unchanged in the next 12 months.
PhilRatings considered the Mindanao-Visayas Interconnection Project’s full operations and the start of the Wholesale Electricity Spot Market (WESM) and Retail Competition and Open Access (RCOA) in Mindanao in giving the credit rating.
It also took into account ACR’s ability to establish joint ventures with strong partners for particular projects and planned expansion projects to further diversify its generation mix.
Other factors include ACR’s continued recovery marked by its notable revenue growth and improved profitability along with satisfactory liquidity, supported by the firm’s positive operating cash flows.