JG Summit to redeem bonds early

MANILA, Philippines — JG Summit Holdings Inc., the listed holding company of the Gokongwei Group, is seeking the early redemption of its 10-year bonds.

In a disclosure to the Philippine Dealing & Exchange Corp., JG Summit said it intends to “exercise its option for early redemption of its 10-year fixed rate bonds due February 2024 on the seventh anniversary of the issue date of the bonds, at the price of 101.5 percent.

In 2014, JG Summit listed P30 billion fixed rate bonds in three tranches: P24.51 billion five-year and six-month bonds with a coupon rate of 5.2317 percent per annum, P5.31 billion seven-year bonds with a coupon rate of 5.2442 percent per annum, and P176.34 million 10-year bonds with a coupon rate of 5.3000 percent per annum.

The 2014 issuance was the second after its P9 billion issue in 2009.

Net proceeds of the 2014 bond issuance were utilized by the company to partially finance the company’s acquisition of Manila Electric Company shares and for general corporate purposes.

JG Summit’s businesses include airlines, malls, hotel, banking, property and petrochemicals.

As of the third quarter last year, JG Summit posted a recovery amid the onslaught of the COVID-19 pandemic on the business environment. Consolidated net income rose to P844 million, a turnaround from the reported net loss of P2.6 billion in the second quarter but still way below the P3.7 billion net income posted a year ago.

During the nine-month period in 2020, JG Summit’s net income was P124 million compared to P21 billion a year ago.

Improving contributions from petrochemicals and real estate coupled with reduced losses from air transport drove the recovery, JG Summit said.

However, the company acknowledged that the group’s operations remain to be challenged by the COVID-19 disruption.