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BreadTalk Group - OCBC Investment 2016-03-22: Issues notes from MTN programme

BreadTalk Group - OCBC Investment 2016-03-22: Issues notes from MTN programme BREADTALK GROUP LIMITED 5DA.SI 

BreadTalk Group: Issues notes from MTN programme 

  • BreadTalk Group has announced an issuance of S$75m 4.60% notes due 1 Apr 2019, pursuant to the S$250m multi-currency medium term note (MTN) programme established in 2014. 
  • Net proceeds arising from this issue will be used for general corporate purposes, including refinancing of existing borrowings, and financing capital expenditure and general working capital. 
  • As of 31 Dec 2015, net debt/equity was at 0.83x. With this issue, an estimated additional S$3.5m of interest expense would be incurred per year, adding some pressure to bottom-line. 
  • While the group is focused on rebranding, improving cost rationalization as well as productivity, we still expect to see the usual drags from gestation, depreciation and potential consolidation. 
  • We prefer to see a steadier state of growth across all segments, and until then, we keep our SELL rating on the stock with fair value estimate of S$0.96.



Jodie Foo OCBC Securities | http://www.ocbcresearch.com/ 2016-03-22
OCBC Securities SGX Stock Analyst Report SELL Maintain SELL 0.96 Same 0.96


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