Submarine fibre optic cable solutions provider Telcotech Ltd, a subsidiary of locally-owned conglomerate Royal Group of Companies Ltd, on September 9 listed a bond on the Cambodia Securities Exchange (CSX) to raise 80 billion riel ($20 million) towards business expansion plans.
Speaking at a virtual listing ceremony, Royal Group chairman Kith Meng said Telcotech had signed an agreement with the Credit Guarantee and Investment Facility (CGIF), a credit-guarantee agency established by the Asian Development Bank and ASEAN Plus Three.
CGIF will provide a credit guarantee covering the full amount of 80 billion riel, he said.
“Ezecom [Co Ltd], together with Telcotech are 100 per cent Khmer companies dedicated to bringing the highest levels of access and connectivity to Cambodians,” he said.
Founded in 2008 by the Royal Group, Ezecom has the largest network of fibre optic cable infrastructure and holds shares in the Asia-American Gateway (AAG) and the Malaysia-Cambodia-Thailand (MCT) submarine cable systems.
Meng went on to say: “The issuance of the bond will enable us to continue to lead the way in shaping Cambodia’s digital future through investments in the latest technologies and digital strategies.
“As chairman, I am extremely proud that this is the first ever bond to be issued by a wholly Cambodian owned company and the fact that it is guaranteed by CGIF. Importantly, it is the first-ever private placement bond that uses the standard system of securities depository and listing of the stock exchange.”
Through the bond issuance, he said, Telcotech has built a roadmap, a model, and the best practices of private placements for the Cambodian capital market.
“Ezecom will use the proceeds of the bond to further invest in the digital ecosystem of Cambodia. Ezecom has played a major role in the digitisation of Cambodia and will continue to do so as we move forward through Industry 4.0. Ezecom vision is to be the leading service provider in digitalising Cambodia through sustainable innovation and ESG [environmental, social, and governance] value creation,” Meng added.
CSX CEO Hong Sok Hour said the issuance and registration of the bond will provide the company long-term capital, a new source of financing in addition to the company’s existing sources.
This form of diversification is expected to fuel the company’s business growth, he said, adding that listing on the CSX will help boost its prestige, and earn it high levels of confidence from domestic and international investors and potential customers.
Sok Hour anticipates that “with the success of the issuance and registration of this bond, the company may consider issuing shares to the public through an IPO [initial public offering], especially for Cambodians to have the opportunity to invest in the future growth of the company”.
Securities and Exchange Regulator of Cambodia director-general Sou Socheat noted that Telcotech is the seventh firm to list a bond on the CSX and the 15th to list overall, saying that its presence indicates a new stage of development for the bourse.
He said the bond issuance “reflects that both companies and public investors have been signalling confidence in this market, which has become a gateway for companies to diversify financing channels, and an investment opportunity for investors as well”.
According to Socheat, the cumulative amount raised from the issuance of bonds was $143 million, and the new offering from Telcotech will bump that up to $163 million.