Halcyon Agri

[yawnyawn]

Halcyon Agri's 5-Year Bond Issue 16x Oversubscribed

Issue amount: S$125mio
Maturity Date: 31 July 2019
Coupon: 6.5% for 3 yrs, with 2% step up to 8.5% if it's not called.

So Halcyon has to now pay S$8.125mio annually in interest payments. Their op. profit is only about S$15mio, interest would be eating up 54% (more if you count in their existing debt) of that.

Rubber prices have been on a downward trajectory for quite a while:
Rubber Price

Their new acquisition better start paying off soon!

The assets that they are buying from Lee Rubber generated an operating profit of S$41.7m in 2013. It is more than enough to pay the interest for this bond issue.

Moreover, Anson has S$93.5m in cash & cash eq as of 31 Dec 2013. Effectively, Halcyon Agri is paying S$357m (S$450m-$93.5m) for these assets. Given that the PAT for Anson is S$29m in 2013, Halcyon is paying roughly 12 times earnings for this acquisition. I think this is a good acquisition for Halcyon.

(not vested)