Strides Arcolab announces launch of US$ 75 million Zero Coupon Convertible Bonds

Strides Arcolab Ltd on June 07, 2007 has announced the launch of US$ 75 million direct, unsubordinated, unconditional and unsecured zero coupon foreign currency convertible bonds due 2012 (the "Bonds"). In addition, the Lead Manager has an option to increase the issue size by an additional US$ 25 million. Given a favourable credit and interest rate environment, STR has decided to issue the Bonds to meet capital expenditure, finance potential overseas acquisition programmes and invest in an overseas subsidiary. The Bonds will be convertible into ordinary shares of STR, quoted in Indian Rupees.

The five year zero coupon Bonds have a yield to maturity of 7.20% to 7.95% per annum (calculated on a semi-annual basis), and the conversion price is expected to be set at a premium of between 30% to 35% to the volume weighted average price of the ordinary shares of STR on the National Stock Exchange of India Ltd (the "NSE") between opening of trade and pricing. The Bonds will be issued at par and redeemed 142.456% to 147.701% of par on maturity. STR has the right to redeem all outstanding Bonds, subject to applicable laws, at their accreted principal amount on or after July 18, 2010 if the parity of the Bonds (in US$ terms) trades for a specified period of time at 130% or more of the accreted principal amount. The Bonds are expected to price today and closing is expected on or about June 26, 2007.

Application will be made for the Bonds to be listed on the Singapore Exchange Securities Trading Ltd and for in-principle approval for the shares to be issued upon conversion of the Bonds to be listed on the NSE and The Bombay Stock Exchange.

Barclays Capital is the Sole Bookrunner and Sole Lead Manager for the offering. State Bank of India is the Financial Advisor to the issue.

Source : Equity Bulls

Keywords