Sri Trang Agro-Industry Pcl. (STA), the world's largest provider of integrated natural rubber products and Thailand's largest producer of rubber gloves, is delighted with the overwhelming response to its issuance of corporate debentures worth THB7 billion. The subscription from institutional investors exceeds three times the issue's value, reflecting their confidence in the company and its business potential with plans for investments to increase production of block rubber.
Mr. Veerasith Sinchareonkul, Chief Executive Officer and Executive Director of Sri Trang Agro-Industry Public Company Limited (STA), reports that the company's latest issue of corporate bonds has received a strong demand from institutional investors as the number of subscriptions made between March 28-30, 2022, with more than 3 times oversubscription representing investor confidence in our strong business and financial performance.
Mr. Veerasith says the latest success follows the similar success of the company's bond issue late last year and clearly reflects the investors' confidence in the company by investing in its debentures, which are securities with regular returns of interest and carry lower risk than investment in common shares.
The Bonds were comprised of 5 tranches of senior unsecured bonds which were 3-year bond with a fixed interest rate of 2.08% p.a., 2-year bond with a fixed interest rate of 2.85% p.a., 7-year bond with a fixed interest rate of 3.56% p.a., 10-year bond with a fixed interest rate of 3.94% p.a., and 12-year bond with a fixed interest rate of 4.17% p.a, respectively. The Bonds were arranged by Bangkok Bank, Bank of Ayudhaya, Kasikornbank, and Siam Commercial Bank. The bond issue has been rated "A-" with "positive" outlook by Tris Rating, emphasizing the company's potential as the world's largest provider of integrated natural rubber products with strong operations amid the recovery of the rubber industry.
STA intends to invest much of the fund raised from the bond issue to boost production capacity at its four plants in the provinces of Kalasin, Loei, Sa Kaew and Trang. Part of the fund will go toward the working capital to respond to the early recovery of the rubber industry, which should lead to rising demands. Determined to continually improve its performance, the company has its eye on increasing sales of all rubber products to 1.6 million tons this year, up by 23% from 1.3 million tons last year, and to grab 12% of the world market share of natural rubber, increasing from 10% at the end of last year.
"We are delighted that the investors have trust in our company and have responded overwhelmingly to our new bond issue," Mr. Veerasith says.
"We are also thankful for the support of four financial institutions for being our underwriters. We aim to use this fund to boost our block rubber's capacity and to be our working capital in order to increase our sales volume supporting the high growth target of the company."