On February 20, Gorenje, d.d., issued 10-month commercial paper bearing an interest rate of 2.20% p.a., with the total value of EUR 27 million, or 35% more than initially planned. Sizeable interest in commercial paper is proof of investor confidence in the Gorenje Group.
Commercial paper with the symbol GRV03 shall be registered, issued in dematerialized form with the central register of dematerialized securities kept by the KDD (Central Securities Clearing Corporation), in denominations of EUR 1,000, and it will be freely transferable. The liabilities arising from commercial paper is backed by Gorenje's entire property; there is, however, no additional underlying collateral. Commercial paper will be traded on the regulated market of the Ljubljana Stock Exchange (Ljubljanska borza vrednostnih papirjev, d. d.). After today's issue, commercial paper will also be offered in the second subscription round from March 2, 2015, to December 1, 2015, up to a final total issue amount of EUR 30 million nominally.
By issuing the commercial paper, Gorenje has raised fresh funds for seasonal financing of its operations. The company has high cash flow requirements early in the year. As the year progresses, they tend to decrease, up to the fourth quarter when cash flow surplus is generated.
In addition, issue of commercial paper is a part of Gorenje's financial source diversification strategy which also included issuing EUR 73 million of bonds last year.
With the last year's issue of 5-year bonds and today's issue of 10-month commercial paper, combined, Gorenje has raised EUR 100 million in capital markets in no more than four months. Thus, Gorenje is sourcing over a quarter of its financing through capital markets, which has resulted in better stability and financing terms.
Gorenje first issued commercial paper in 2013 when the interest rate was 4.45% p.a.; in the 2014 commercial paper issue, the interest rate was 4% p.a. This year's issue is an important step in cutting the Gorenje Group finance expenses.
All services and activities regarding the organization and progress of the offering of commercial paper in dematerialized form by registration with the central register of KDD, and listing of commercial paper in the regulated market, are rendered for Gorenje, d.d., by Alta Invest, investicijske storitve (Investment services), d.d.
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