By Kenneth Lim
Boston, Jan. 18 - A wholly owned subsidiary of Essar Energy plc priced $500 million of five-year exchangeable bonds on Tuesday at the cheap end of talk to yield 4.25% with an initial exchange premium of 30%, according to market sources.
The notes were offered by Essar Energy Investment Ltd. at par and may be exchanged into common stock of the parent company. Price talk was at a coupon of 3.75% to 4.25% and an initial exchange premium of 30% to 35%.
Deutsche Bank AG, London Branch, J.P. Morgan Securities Ltd. and Standard Chartered Bank were the bookrunners of the Regulation S offering.
The bookrunners have an over-allotment option for a further $50 million.
The notes may be called after three years subject to a hurdle at 140% of the exchange price. There is no put, except in a change of control.
Proceeds will be used to pursue acquisition opportunities of power, coal and oil assets, as well as for general corporate purposes.
Essar is a London-based energy company that does business mostly in India.
| Issuer: | Essar Energy Investment Ltd.
|
| Issue: | Exchangeable bonds into Essar Energy plc common stock
|
| Guarantor: | Essar Energy plc
|
| Amount: | $500 million
|
| Greenshoe: | $50 million
|
| Maturity: | 2016
|
| Bookrunners: | Deutsche Bank AG, London Branch, J.P. Morgan Securities Ltd., Standard Chartered Bank
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $11.0861
|
| Conversion ratio: | 90.2030
|
| Takeover protection: | Change-of-control put
|
| Call protection: | Non-callable before 2014, thereafter callable subject to 140% hurdle
|
| Puts: | None
|
| Price talk: | 3.75%-4.25%, up 30%-35%
|
| Pricing date: | Jan. 18
|
| Settlement date: | Feb. 1
|
| Distribution: | Regulation S
|
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