SOCAR starts interest payment on its USD bonds
By Nigar Abbasova
Azerbaijan’s state energy major SOCAR has launched dividend payment to owners of its USD bonds.
SOCAR Vice-President for economic issues Suleyman Gasimov said that on the first day of payment the owners received dividends worth 1.25 million manats (over $ 677,131).
“The financial means have already been transferred to the accounts of owners and they are allowed to use the funds as they wish,” he said during a press conference on January 17.
The interest on bonds is being paid once a quarter. Next payments are scheduled for April 17, June 17 and October 17.
SOCAR Capital’s chief consultant on securities markets Ali Agaoglu, in turn, said that operations on the secondary market are running very actively.
“As of today, the volume of deals on the secondary market in Baku Stock Exchange amounted to $42 million. The bonds also enjoy popularity among foreigners,” he said.
The company issued some 100,000 dollar bonds with nominal value of each $1,000 in September 2016, while the bond sale on the secondary market was launched on October 18.
Operations on the secondary market provided foreign individuals and legal entities with a right to buy bonds from their owners, as only Azerbaijani citizens and local companies had a right to obtain bonds on the primary market. The highest price for each bond in the secondary market was fixed at the level of $1,024, while a bottom-low figure stood at $1,000.5.
One of the main objectives of placing bonds in the domestic market was diversification of financing sources, as well as provision of new investment opportunities for the population
New emission of bonds
Gasimov further noted that today, the company sees no necessity to issue new bonds in the near future. “In case there is such a need, SOCAR can hold another placement of securities,” he added.
Gasimov said that all will depend on market demands.
He added that the second emission if implemented, will offer interest rate set at a level below five percent. As for the denomination of bonds, Gasimov said that an analysis should be carried out to make a final decision.
“For the time being, banks offer high interest rates (more than 10 percent on a yearly basis) on the manat deposits. To ensure competitiveness, we should offer higher interest yield, which is not advantageous for us,” he clarified.
Eurobonds for international market
Gasimov also mentioned that SOCAR will finish the repayment of the principal amount on Eurobonds worth $500 million in February 2017.
SOCAR has already implemented three issues of Eurobonds in the international market. SOCAR's Eurobond debut issue to the amount of $500 million with a yield of 5.45 percent per year was made in February 2012.
Economic indices
Gasimov further said that revenues of the company totaled nearly 550 million manats ($ 307.8 million) in the first half of 2016, while the company plans to retain and even increase the figure in the second half of the year.
Net profit of the company in 2015 amounted to some 3.25 billion manats ($ 1.81 billion), while profit from the company’s operational activity totaled almost 1.29 billion manats ( over $72 million) in 2015.
Total assets of SOCAR amounted to 39.95 billion manats ($ 22.35 billion) in 2015, as compared to about 24.07 billion manats ($ 13.47 billion) in 2014.
Total capital of the company amounted to 14.65 billion manats ($ 8.19 billion) in 2015, as compared to 11.06 billion manats ($ 6.19 billion) in 2014.
--
Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
Follow us on Twitter @AzerNewsAz
.jpg)
