Taiwan Cement mulling another CB offer as USD 800m paper puttable soon

Breaking News 17 March

Taiwan Cement mulling another CB offer as USD 800m paper puttable soon

Taiwan Cement [TPE: 1101], the island's largest cement producer, is considering another convertible bond offer, a source familiar with the situation and a market participant told this news service.

The company has a 2026 USD 800m CB puttable in July this year. The outstanding bond trades at around 90, or a 63% parity, a Hong Kong-based investor said.

According to the source, Taiwan Cement will discuss at a board meeting next week a resolution to increase its registered share capital to roughly TWD 100bn (USD 3.3bn) from around TWD 73bn.

Another CB sale is among the options considered to help the company expand its share capital, the source added.

Taiwan Cement has been a frequent issuer in Asia's equity capital market in recent years, having just raised USD 437m from a global depositary receipts offer in September 2022, issued the USD 800m CB in December 2021, and a USD 400m CB in November 2018.

The island’s largest cement producer has in recent years expanded into renewable energy operations.

As reported by this news service earlier, the company's renewable energy operations require a capital expenditure of around TWD 10bn each year. The company has started generating revenue from green energy, energy storage and charging systems businesses, but it won’t be until 2024 that the new businesses begin contributing to the bottomline, as reported.

The source said the TWD 10bn per-year capex is a dynamic number rather than a static one as raw material costs rise.

Taiwan Cement's shares closely nearly flat at TWD 36.40 on Friday, up 8% year-to-date, while Taiwan's tech-heavy benchmark index has lost 7%.

Taiwan Cement declined to comment.