Indonesia textile firm PT Sri Rejeki Isman Tbk (Sritex) through its unit Golden Legacy Pte Ltd, has announced the settlement of cash tender of senior debt of $180.7 million of the $270 million aggregate principal amount.
On June 1, Golden Legacy has priced an offering of $350 million in aggregate principal amount of 8.25 per cent senior notes due 2021. Concurrently with the offering of the notes, the issuer had also commenced a cash tender offer to repurchase any and all of the outstanding 9 per cent senior notes due 2019.
On June 7, the holders received the total consideration for the tender Offer – $1,052.50 for each $1,000 principal amount of old notes plus accrued and unpaid interest from the last interest payment date.
The financing of the buyback was done through the issue and sale (by the issuer) of $350 million in aggregate principal amount of 8.25 per cent senior notes due 2021, which were also delivered on Tuesday.
Citigroup Global Markets Singapore Pte. Ltd. and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch acted as the dealer managers for the Tender Offer. D.F. King & Co., Inc. acted as the information agent and tender agent for the tender offer.
Strong operating cash flow, supported by improved working capital management and stable profit margins, has convinced analysts at Fitch that Sritex would generate CFO margins of between 7 to 10 per cent over the next three years.
Sritex also has relatively small operating scale compared with its international peers, but the company has expanded production that EBITDA is projected to grow by more than 50 per cent.
“Other key assumptions include revenue growth of 9 per cent in 2016 and 12.5 per cent in 2017, and EBITDA margin to remain around 18 per cent,” said Fitch analysts in a report.
Sritex currently exports 48 per cent of its products to around 30 countries in Asia, including Papua New Guinea and Timor Leste, the Middle East, including the UAE and Qatar, Europe, including Germany, Sweden, Norway and the Netherlands, the US and Africa.
In the global market, Sritex competed with India’s Vardhman Textiles, Arvind Limited, China’s Shenzhou International Group, and Texhong Textile Group, and Taiwan’s Makalot Industrial.