Textile issuer, PT Pan Brothers Tbk (PBRX) will take a corporate action this year by holding a rights issue or additional capital with pre-emptive rights. PBRX is targeting US$ 50 million from the rights issue. Pan Brothers Corporate Secretary Iswardeni said that his party will undergo a rights issue process after the company completes the restructuring of its debts. In this case, PBRX intends to complete the signing of the loan agreement as part of the restructuring with all parties, including syndicated, bilateral creditors, and note holders.
PBRX's management targets the rights issue to be completed in the next second semester. "The target for the completion of this rights issue is September 2022," said Iswardeni, Monday (1/2).
He added that all proceeds from the rights issue would be used as PBRX's working capital. PBRX also believes that the market will be able to absorb the issuance of new shares by this company. "Our standby buyer rights issue already exists," he added, without mentioning the name of the strategic investor.
PBRX has not said much about its sales performance target in 2022. To be clear, Iswardeni estimates that PBRX's performance this year will at least equal or slightly exceed last year's achievements.
Higher sales performance growth is expected in 2023 in line with expectations of an improving textile industry climate and the completion of PBRX's debt restructuring. "In 2023, it is targeted that sales performance can grow by double digits," said Iswardeni.
PBRX Management's optimism towards performance prospects this year and beyond is inseparable from the securing of bilateral funding from banks for the company's working capital. Currently, PBRX's total credit facilities range from US$ 43 million - US$ 45 million from HSBC, Maybank, UOB, and Bank Permata with a two-year tenor.
In the restructuring term sheet, PBRX can increase its credit limit up to US$ 100 million. Two banks that had stopped their facilities, namely HSBC and Maybank, have also agreed to resume lending to PBRX.
Citing PBRX's public exposure material in December 2021, PBRX has several long-term strategies, one of which is to become a strategic partner for company consumers or buyers.
In this case, the customer will commit to providing PBRX with the agreed minimum order quantity. Certainty in sales will also help PBRX to better manage material purchase budgets and production plans.
The strategic partnership also allows PBRX to increase its market share and diversify its offerings with specific customers. In general, conversions to strategic partnerships are targeted for annual sales growth of up to 20% - 25%.
Not only that, strategic partnerships allow PBRX to obtain working capital support such as vendor financing facilities.
In addition, PBRX also has a strategy to increase the company's margins. This step was taken by prioritizing customers who offer higher margins, especially from small to medium customers and focusing on obtaining orders from big brands.
PBRX also diversifies its products into premium lifestyle products to maximize facility utilization during low season production periods. There is also the implementation of automation and digitization which is expected to increase efficiency and product quality.
For information, as of the third quarter of 2021, PBRX sales fell 3.04% (yoy) to US$ 507.81 million. Meanwhile, net profit attributable to owners of the parent company PBRX decreased 1.19% (yoy) to US$ 19.02 million.