TOKYO -- Suntory Beverage & Food is stepping up efforts to diversify funding sources, with plans to raise 20 billion yen to 30 billion yen ($193 million to $290 million) through its first-ever issuance of straight bonds.
The Tokyo company went public last July and raised nearly 300 billion yen through its public offering. Parent Suntory Holdings owns roughly 60% of all outstanding shares in the food and nonalcoholic-drinks company.
But Suntory Beverage has taken steps to boost its financial independence from the parent company. It just paid off around 128 billion yen in debt -- about 70% of its overall interest-bearing loans -- to Suntory Holdings, and plans to avoid borrowing from the parent in the future.
In late May, the beverage unit applied for a 200 billion yen shelf registration for corporate bonds, with plans to offer five- and 10-year instruments. Proceeds will be used to pay down debt. It is also considering raising funds for acquisitions through bond offerings.
Suntory Beverage expects its group net profit for the year through December to jump 12% to 35 billion yen, thanks in part to higher sales in Europe. Its cash on hand is also growing. The company aims to improve its financial health, lowering its net debt-equity ratio from 0.4 at the end of last year to 0.2.