Aveng readies R2bn convertible bonds
South Africa’s largest construction and engineering group Aveng (AEG) last week Wednesday reported the launch of its convertible bond offering with a base of R1.5bn and an upsize option of R500m.
The company said the bonds would be issued at 100% of their principal amount and were expected to carry a coupon of between 6.75% and 7.50% a year‚ payable semi-annually in arrears on January 24 and July 24 of each year. The first coupon would be paid on January 24 2015.
The offering would be made by way of an accelerated book-build offering via a private placement to South African and international institutional investors outside the US.
The company said it intended to use the net proceeds from the offering to repay certain existing debt facilities‚ extend its debt maturity profile and for general corporate purposes.
“The offering forms part of the company’s strategy to manage its liquidity needs‚ diversify its funding sources and reduce its reliance on bank debt‚ and to position itself to take advantage of growth opportunities‚” it said.
The bonds were expected to be priced on Wednesday and it was expected that settlement of the bonds would take place on or about July 23.