Phu Nhuan issues bonds to cover expansion

October 28, 2015 | 15:48

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Phu Nhuan Jewelry JSC (PNJ) has announced the plan of issuing a volume of VND500 billion ($22.93 million) corporate bonds this year to raise capital.

Particularly, PNJ will issue a maximum bond cluster worth $22.93 million, valued at VND1 million ($45.87) per bond, with a maturity of one year.

The amount of money collected will be spent on restructuring VND350 billion ($16.1 million) of the company's short-term loans and developing a VND150 billion ($6.88 million) retailer network.

The bonds will be divided into two types—secured bond, which are stakes owned by shareholders with benefits such as dividends and rights to purchase shares, and non-secured bonds.

The bonds’ interest rate is said to be based on the market interest rate at the time of issuance and will be fixed until the maturity date.

Earlier this month, PNJ announced that it would raise the company's capital by 20 per cent to VND1.2 trillion ($55 million) from the initial VND982.75 billion ($45 million) by offering 20 million additional shares to the company's current shareholders. This plan has been now cancelled and replaced by the new plan of bond issuance.

PNJ said that it needs prompt financial resources by the end of this year to facilitate its business expansion ambitions, which is the reason why the latter plan has been chosen. Under the former plan, the company would have had to wait until next year for the cash flow from the share offering to pour in.

By By Thanh Xuan

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