Huot Ieng Tong, president and CEO of Hattha Kaksekar Limited (HKL) yesterday said backed by a solid financial performance the company has strong confidence its upcoming corporate bond listing on the local stock exchange will be a success.
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“We can say that we have strong confidence in the success of the first corporate bond issuance in Cambodia. We have the backing of our strong financial performance and a good track record in the financial sector.
“Proceeds of the bond will be used to fund the growth in HKL’s lending business, for working capital and capital expenditure, to develop more state of art technology and other infrastructure.
“The proceeds will also be used to support rural micro, small and medium enterprises (MSME), including women entrepreneurs,” said Mr Ieng Tong.
Mr Ieng Tong spoke at “The First Cambodian Corporate Bond” roadshow promoting the company’s initial public offering.
The microfinance and deposit-taking institution will issue 1.2 million bonds with a total value of KHR120 billion ($30 million). It has a maturity date of three years (2018-2021) from the date of issue and carries a coupon rate (Gross) of 7.5 percent to 8.5 percent.
Mr Ieng Tong said the bond has attracted the attention of the International Finance Corporation, which is committed to invest up to KHR80 billion ($20 million) or 800,000 bonds in order to help establish the Cambodian bond market.
Vattanac Bank, the Cambodia Commercial Bank, and Cambodia Reinsurance have also committed significant investments of about KHR20 billion ($5 million), or 200,000 bonds.
The opening date for the subscription is October 24, and the closing date is October 31, while, the issue date is on November 1. The listing is set for November 13.
This historic transaction will be the first-ever corporate bond issued in Cambodia and is an important step in the continued growth and development of Cambodia’s capital market, the company said.
HKL will become the sixth company to be listed on the Cambodian Stock Exchange (CSX).
HKL said it will sell KHR80 billion of bonds. If there’s higher demand, it will sell another KHR40 billion of bonds.
Hong Sok Hour, CEO of Cambodia Securities Exchange, said he believes the exercise will be a success due to massive support from the public and from investors.
“I hope that Hattha Kaksekar and other financial institutions will consider raising funds through the additional bond issuance in the future. I always encourage all businesses to take advantage of stock market to raise funds that will allow them to expand their business,” he said.
Sou Socheat, director general of Securities and Exchange Commission of Cambodia, said the roadshow is to update the public on new developments and that CSX is pursuing more companies to list on corporate bonds.
He said to maintain the country’s economic sustainability and push the economy to reach its full potential the financial system must be strong and efficient. The stock market will play an important role to complement the current banking system, he said.
“The listing will help the company to access additional finance and will be a boost to its value. It also opens the door for the public to invest in the company. The proceeds will help HKL to provide loans to the businesses and the public,” Mr Socheat said.
Chan Kok Choy, executive director and general manager of Vattanac Bank, said, “This is the first corporate bond and we would like to show our support. Of course, we are very impressed with the good financial performance, good track record, good management, good shareholders and good perspective of HKL,” Mr Chan said.