Royal Railway issues $10 million bonds on CSX | So Good News
Train operator Royal Railway Plc, a subsidiary of local conglomerate Royal Group of Companies Ltd, on October 31 became the eighth firm to list a corporate bond on the Cambodia Securities Exchange (CSX) to raise 41 billion riel, or about $10 million, to expand their operations.
A total of 410,000 units were issued at a face value of 100,000 riel, with an annual coupon rate of seven percent paid annually and a 10-year maturity with a maturity date of October 10, 2032, according to the CSX website, which noted that the bond was underwritten by SBI Royal Securities Plc.
Speaking at the listing ceremony, Royal Group chairman Kith Meng confirmed that another $20 million bond is planned later this year, as “part of my commitment and ongoing investment in the railway”, “to provide the country and its people with a reliable safe and economic service” and “assist in the economic growth” of the country.
In 2007, railway operations in Cambodia ceased for a rehabilitation project. On 12 June 2009, the Cambodian government awarded a 30-year concession agreement to Toll (Cambodia) Co Ltd – a joint venture between Australian-owned Toll Holding Ltd and the Royal Group – to manage the operation of the kingdom’s railway system.
Meng revealed that since operations restarted in 2010, “I have invested over $100 million” in the railway. “This bond will be used to upgrade the railway line and carriages and locomotives plus new equipment which will further modernize the railway.
“Soon we will receive 130 wagons and four more locomotives,” he said, noting that this order includes 210 wagons to be delivered at a later date.
It is worth noting that in 2014, Toll Holding transferred its 55 percent stake in Toll Cambodia to Royal Group, which then changed the company’s name to Royal Railway Cambodia.
Meng shared that rail freight volume increased by 34 percent from 2017 to 2021, and that passenger and freight trains run seven days a week on the Phnom Penh-Poipet and Phnom Penh-Sihanoukville lines. In addition, Royal Railway operates container, fuel, cement and stone goods trains seven days a week to Sihanoukville and Battambang, he said.
CSX CEO Hong Sok Hour hailed the local exchange as a: solid financing option for companies that need additional capital to expand their business potential, a source of passive income for investors, and a key marketing vehicle for investment in Cambodia.
State Secretary for the Ministry of Economy and Finance and CSX Chairman Hean Sahib, who presided over the ceremony, commented that Royal Railways’ exclusive rights to operate Cambodia’s railways has been a contributing factor in the development of the network, which he said is in line with the government. policy to promote and develop the Kingdom’s transport and logistics systems.
“Today’s performance will be a model for other enterprises willing but reluctant to enter the securities market, giving them the confidence to seize the opportunity and raise funds from the stock market to strengthen and expand their business,” he said.
Currently, a total of 17 companies are listed on CSX – seven companies have issued shares in the main board and two in the growth board – and eight companies have listed their bonds.
With trading launched on April 18, 2012, CSX is co-owned by the Ministry of Finance and the Korea Exchange (KRX) in a 55:45 ratio.