García Munté Energía (GME) has established its first Commercial Paper programme in BME’s Alternative Fixed Income Market (MARF) for a maximum outstanding of 50 million euros and maturities up to 24 months, which will enable the company to issue short-term debt over the next 12 months.
GME is a distributor of solid fuels such as petcoke, coal, anthracite, or biomass, fuels commonly used for combustion. The company was founded in 1922 in Barcelona and it is currently under the leadership of the third generation of the García Munté family. The company has grown through mergers and acquisitions of companies. It wasn’t until1970 when the internationalization of the company started. Nowadays it has presence in 10 countries, as Portugal, Mexico, and Morocco, among others and they will expand their business to Italy and Tunisia in the near future.
To optimize their efficiency in distribution, they seek agility in the supply of raw materials, and minimization of costs. With this end, they invest in both new infrastructures and in upgrades of port terminals, stockyards and minerals processing plants. With the commercial paper program, the company will be able to finance all these operations.
As of December 2019, GME had consolidated revenues of 649 million euros, a 10% increase compared to the previous year and the EBITDA reached 21 million euros. In 2020, the provisional financial figures showed revenues of 430 million euros, a 34% decrease compared to 2019.
Commercial Papers are an efficient source of funding
Commercial Papers are short-term money-market securities used as a funding source by financial institutions, as well as governments, supranational agencies and mid and large corporations.
For corporate issuers, Commercial Papers are an extremely efficient funding source, that is complementary to banking facilities and credit lines. It is an efficient working capital solution via Debt Capital Markets.
Commercial Papers are issued under a shelf programme, that has an annual validity (renewable) and a predetermined maximum outstanding size. Notes under a CP programme may be issued at a discount or at a premium, they may bear fixed or floating rate interest. Although CPs, most usually, carry an implicit coupon, they are issued at discount and mature at par (100%)
Maturity of Notes ranges from 3 days to 24 months for Pagarés Programmes and from 1 to 364 days for ECP (European Commercial Paper Programmes).
Commercial Papers are multi-currency instruments that can be issued in different currencies; predominantly in EUR, USD, CHF and GBP. They have a minimum denomination of €100K and are intended for wholesale institutional investors, both national and international.
Source: (see the entire post here)