Gemadept extends convertible debenture issue to raise funds

The firm wants to extend its bond issue to attract greater funding

The extension comes at a time when the previous plan to raise $70 million of a total $96.3 million investment required, expired at the end of last year with only $40 million in convertible debts issued.

The Ho Chi Minh City Stock Exchange-listed logistics and port operator will attract the remaining $30 million from private placement institutional investors to finance both its core business and rubber plantation projects.

These instruments will have a term of between one to five years and carry a maximum interest rate of 6 per cent per annum. They can be converted into common shares with the conversion ratio open to negotiation, but not be any lower than 70 per cent of Gemadept’s average market prices a month prior to the conversion date.

Gemadept will use the money to upgrade its Dung Quat International Port in the central province of Quang Ngai, thus enabling the terminal to service ships of up to 70,000 DWT. It will also expand the 15-hectare Nam Hai Dinh Vu Port in the northern coastal city of Haiphong by six hectares.

For its logistics business, Gemadept plans to enlarge its distribution centres and enhance the firm’s IT system to better manage these centres. It will also plant an additional 2,000 hectares of rubber in Cambodia to expand total acreage to 7,000 hectares this year and to 10,000 hectares by 2015.

Nam Hai Dinh Vu Port, which was inaugurated almost a month ago, is now able to handle four to five ships per week. This is fourth port in Gemadept’s portfolio alongside Dung Quat International Port, Phuoc Long ICD in Ho Chi Minh City and Nam Hai Port in Haiphong.

Gemadept expects the new terminal will be able to offset almost all the profits generated by leasing offices at the Gemadept Tower in Ho Chi Minh City’s District 1 this year after it sold an 85 per cent stake in the building owner Marproco to South Korea’s CJ Group and its affiliates late last year.