Train operator Royal Railway Plc, a subsidiary of local conglomerate Royal Group of Companies Ltd, has received “approval in principle” from the Council of the Non-Banking Financial Services Authority (NBFSA) to issue a bond worth about $10 million on the Cambodia Securities Exchange (CSX), which could happen as soon as mid-October.
The green light was given at a September 19 meeting of the NBFSA – a body under the Ministry of Economy and Finance – chaired by minister Aun Pornmoniroth, who doubles as the authority’s chairman, to pave the way for the company to pursue further procedures to list on the bourse.
Sou Socheat, director-general of Securities Regulator and Exchange of Cambodia (SERC) under the NBFSA, told The Post on September 20 that the company has been cleared for listing, and only needs to work with the CSX to prepare.
“I think that the company is well-prepared, so it will not take them much time. The company will proceed with other procedures with the CSX for the listing,” he added.
Kim Sophanita, director of the CSX’s Market Operations Department, suggested the company market their bonds to target buyers or the general public through a roadshow and then open for subscription.
“Once they are done with the issuance process and get [an] approval letter from the SERC, the final step is to file the listing application to CSX. I expect the applicant can get listed in mid-October if everything goes smoothly,” she explained to The Post on September 20.
On June 12, 2009, the Cambodian government granted a 30-year concession agreement to Toll (Cambodia) Co Ltd – a joint venture between Australian-owned Toll Holding Ltd and Royal Group – to manage the operations of the Kingdom’s railway system.
In 2014, however, Toll Holding transferred its 55 per cent stake in Toll Cambodia to Royal Group, which then changed the venture’s name to Royal Railway Cambodia.
Royal Railway received approval in principle from the CSX on September 7. The company’s corporate bond is set to be the first issued on the local exchange this year, and the firm will be the Royal Group’s second subsidiary to issue this type of debt security, after Telcotech Ltd, whose September 9, 2021 offering was worth 80 billion riel ($20 million).
At present, a total of 16 companies feature on the CSX – seven companies have issued shares on the Main Board and two on the Growth Board – and seven corporations have listed their bonds.