The publicly listed Royal Group Phnom Penh Special Economic Zone (PPSP) plans to raise an additional $15 million through the issuance of a green bond on the Cambodia Securities Exchange (CSX). The effort is part of their investment expansion into eco-friendly infrastructure.

The company announced that its board of directors had approved the listing during their meeting on November 10, with the aim of generating additional funds for business expansion, according a CSX statement on November 13. 

“PPSP would like to inform investors and the public that the resolution for the issuance of debt securities (green bond) to qualified investors of up to $15 million for a tenor of five years was approved by the board of directors during their meeting on November 10,” the company stated.

Proceeds from the bond will be allocated for sustainable infrastructure. However, the issuance of the bond is still subject to review and approval by the relevant parties involved in the process of guaranteeing the issuance.

The company stated that it is currently in the process of seeking approval from the Securities and Exchange Regulator of Cambodia (SERC) and the CSX, in compliance with applicable laws and regulations. The process is expected to be completed by early next year.

Hong Sok Hour, CEO of CSX, stated on November 15 that while the company has received internal approval for the issuance, they have yet to submit any listing application to the CSX.

“So far, the company has only approved the [launch] internally. Regarding the issue, the company will adhere to the … process, but it shouldn’t take long as they have previously issued securities and are well known to the public, who will understand any associated risks or concerns. I think the preparation … will take about two to three months,” he said.

In the company’s filing with the CSX on August 22, Kith Meng, non-executive chairman of the PPSP, reported that the company reached a total revenue of 29.7 billion riel ($7.14 million), marking a 95% increase from 15.2 billion riel ($3.69 million) in the second quarter of 2022.

The company recorded a net profit of 2.5 billion riel ($607,294) in the second quarter of 2023, in contrast to a net loss of 515 million riel ($125,102) in the same period of 2022.

“The financial position of the company remains strong as of June 30, 2023, with total assets amounting to more than 527.5 billion riel [$128.1 million]. This includes non-current assets of 210.1 billion riel [$51.04 million] and current assets of 317 billion riel [$77 million],” Meng stated.

The company’s total equity increased by 10.5% to 281.6 billion riel ($68.4 million) as of the end of June 2023, up from 254.8 billion riel ($61.9 million) recorded in the corresponding period of the previous year. Meanwhile, the company’s debt-to-equity ratio was 0.87 in Q2 2023, showing a slight increase from 0.85 in the same quarter of 2022.

Hiroshi Uematsu, director of PPSP, noted that as of June 30, the Phnom Penh Special Economic Zone (PPSEZ) is one of 17 operational Special Economic Zones (SEZs) out of a total of 36 approved by the government.

“PPSP leads in terms of the number of investors, total investment amount and total workers among SEZs in Cambodia. It is one of the largest in Cambodia by land size, measuring approximately 357.3 hectares,” he explained.

As of the end of Q2 2023, the company had registered a total of 104 investors or tenants from various countries including Japan, Singapore, Malaysia, Korea, the Philippines, China, Vietnam, Turkiye, Thailand and the US.

“We mainly target investors involved in light to medium-scale, labour-intensive industries. To date, we have attracted investors who sell their products both locally and overseas,” Uematsu explained.

“They are involved in diverse sectors such as mechanical and electrical products, garments, shoes, apparel and fashion, food processing and agricultural industries, consumer products including pharmaceuticals and packaging, automobile parts, assembly of pre-produced parts to final products and logistics,” he added.