SET-listed CP All Plc's bonds worth more than 11 billion baht and due to expire this year may complicate the company's future fund-raising after the board refused to take action against senior executives found guilty of insider trading, says an institutional investor.
The investor, who declined to be named, said the first two series of CP All bonds worth 11.8 billion baht would expire on Oct 31, and the company was likely to issue another batch to refinance the retiring lots.
Generally, corporations that raise funds through bond issuance will refinance retiring bonds to keep financial costs at a certain level, rather than seek new bank borrowing.
Such massive deals are subject to the Bank of Thailand's single-lending rules, which limit a bank in its lending to a single borrower or single project at a certain level.
CP All could either sell directly to retail investors or make an offering to institutional investors.
Another source said if the company focused on selling bonds to institutional investors, it might meet resistance since most institutional investors had unloaded their investment in CP All because no further action had been taken against the executives.
"On the other side, if the company offers its corporate bonds to retail investors and they receive a good response, it means the efforts of the institutional investors have gone to waste," the source said.
"If the company also fails to raise funds from retail investors, the company's credibility will be shaken severely, and I don't know if that would affect the credibility for fund-raising of the entire Charoen Pokphand Group.
"If CP All fails to raise both retail and institutional funds, its lenders will face a hard decision, as they already lend them huge capital, and they cannot allow the loans to become trouble for financial institutions."
The source said most institutional investors had unloaded their investment in CP All since the insider-trading scandal broke.
CP All dominated the headlines early last month after regulators said four senior executives were found guilty of using inside information to purchase shares of cash-and-carry giant Siam Makro Plc ahead of the company's announcement it would buy out Makro at above market value in 2013.
Executive board chairman Korsak Chairasmisak was implicated. He has refused to resign, and the company's independent directors and audit committee released a statement saying they would take no further action against the four executives.
CPALL shares closed yesterday on the SET at 41.50 baht, up 1.25 baht, in trade worth 844 million baht.