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Li & Fung strengthens capital structure

Supply chain giant Li & Fung has completed a simultaneous bond tender offer and new bond offering, as it seeks to solidify its capital structure.

The measures are aimed at giving the company greater financial flexibility as it introduces its new three-year plan.

The new bond issuance is for $400m (£325.25m) five-year medium-term notes at a 4.375% interest rate. The bond tender offer resulted in a buyback of $375.8m (£305.6m), representing 50.1% of Li & Fung’s outstanding $750m (£609.8) bond, which will mature in May 2020.

In June, its logistics arm received $300m (£243.9m) investment from Temasek, and Ed Lam, CFO of Li & Fung described the business as being “in a very strong cash position with low gearing ratio and sound financial footing”.

Spencer Fung, group CEO, said: “We have made significant progress in our current three year plan and are winning market share and new customers due to our operational excellence, global diversified network and 3D virtual design services.

“Our capital structure gives us a solid foundation for our new three year plan. It allows us to seize market opportunities amid global trade disputes and to accelerate our transformation as we create the supply chain of the future for the benefit of our customers and our industry.”

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