ASIAN logistics operator GLP told investors it has identified sources to help it repay a US$1 billion US dollar bond due 2025 and has already paid back US$1.7 billion of its other bonds this year.
Repaying the 2025 bond may include tapping the debt market and loans from its “core relationship” banks, GLP chief financial officer Nicholas Johnson said during a May 3 investor call.
About 46 per cent of the company’s debt is maturing by the end of this year, and it plans to repay that amount with cash on hand, operational cash flow and proceeds from asset sales, according to filings and comments from the call.
The repayment update comes after GLP recently had its debt rating cut, and as a Chinese company explores a possible bid for a stake in one of its units. Investors are closely monitoring the spillover effects of China’s property-sector debt crunch into regional companies like GLP, which has a majority of its revenue generated from China.
Its 3.875 per cent US dollar bond due 2025 was largely unchanged on Monday (May 6) morning at 89 cents on the US dollar, Bloomberg-compiled prices showed.
GLP, which is headquartered in Singapore, has been looking to sell some of its Chinese assets. Negotiations are still ongoing, and a major part of its Chinese business that’s been earmarked for a “strategic transaction” has been “monetised,” Johnson said. In September, the company announced that due diligence involving the China portfolio has been completed.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
GLP China still has a net asset value of over US$14 billion as of December, he said. “We will continue towards the previously communicated US$10 billion monetisation programme.”
As of the end of 2023, GLP had around US$2.2 billion of cash and cash equivalents, according to its latest financial statement. Total liabilities were about US$23 billion.
S&P Global Ratings downgraded the company to junk last November – citing slower-than expected asset monetisation and deteriorating liquidity – before withdrawing the grades at the company’s request.
China’s state-owned Guangdong Holdings is considering a potential bid for a controlling stake in GLP’s China operations, Bloomberg reported last month. GLP’s management refused to comment when asked about the matter on the call and said its operations won’t be impacted if such a deal were to emerge. BLOOMBERG
