IOI Corp restructures US$600m bond, eyes M&A

IOI Corp restructures US$600m bond, eyes M&A
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KUALA LUMPUR (July 30): IOI Corp Bhd said it is restructuring its US$600 million (about RM2.54 billion) bond, a move which may include new issuance of notes and securing term loans from banks as the oil palm plantation company eyes mergers and acquisitions (M&A) for growth.

TA Securities Holdings Bhd analyst Angeline Chin wrote in a report today that IOI Corp officials said in a recent conversation with TA Securities that the US$600 million bond, which is due in June 2022, represented around half of IOI Corp's reported borrowings as of March 31, 2021.

"The current low net gearing ratio of 0.3 times provides room for the group to gear up more to grow its businesses via potential M&A,” Chin said.

According to IOI Corp’s latest financial statements, the company had RM3.7 billion worth of borrowings under the non-current liabilities section of its balance sheet as at March 31, 2021.

Under the current liabilities section, IOI Corp said its short-term borrowings amounted to RM1.12 billion.

IOI Corp’s earnings have improved. For the third quarter ended March 31, 2021 (3QFY21), the group said net profit rose to RM401.3 million from RM100,000 a year earlier while revenue was higher at RM2.86 billion versus RM2.03 billion.

For 9MFY21, IOI Corp said cumulative net profit climbed to RM1.03 billion from RM362.6 million a year earlier while revenue increased to RM7.79 billion from RM5.76 billion. 

At Bursa’s 12:30pm break today, IOI Corp’s share price settled down five sen or 1.35% at RM3.65 for a market value of about RM22.96 billion.

IOI Corp has 6.29 billion shares.

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IOI Corp says oil palm land buy from NPC slated for completion by 1Q22

Chong Jin Hun