By Kenneth Lim
Boston, Feb. 13 - India's Nahar Industrial Enterprises Ltd. priced $45 million of five-year zero-coupon foreign currency convertible bonds at a 6.25% yield and an initial conversion premium of 30%, syndicate sources confirmed.
The bonds, which are due on Feb. 16, 2011, have an initial conversion price of Rs. 200 and will be redeemed at 136.055% of the principal amount at maturity. They may be called after Feb. 15, 2009, at 130% of the principal amount. The conversion price will be reset downwards on Feb. 15, 2008, by up to 10%.
The issuer may force conversion of the bonds from Feb. 15, 2008, if the 20-day volume-weighted average price of the underlying stock exceeds 120% of the conversion price before call.
Bondholders will receive a 5% bonus of additional shares if they convert before Feb. 15, 2007, plus an additional 5% if they convert before Feb. 15, 2008.
The bonds enjoy dividend protection for payouts above 1%.
Jefferies International, the bookrunner of the deal, has a greenshoe option of $5 million for 30 days.
Ludhiana, India-based Nahar Industrial is the listed oil-and-soap and textile division of the Nahar Group industrial conglomerate, which also has businesses in vegetable oils and sugar. Nahar Industrial last year embarked on an expansion plan involving production facilities, retail stores and a co-generation power project costing more than Rs. 8 billion and expected to last to 2008. The convertibles in the new issue are to help finance those plans.
| Issuer: | Nahar Industrial Enterprises Inc.
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| Issue: | Foreign currency convertible bonds
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| Bookrunner: | Jefferies International
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| Amount: | $45 million
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| Greenshoe: | $5 million
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| Maturity: | Feb. 16, 2011
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| Coupon: | 0%
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| Redemption price: | 136.055
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| Yield: | 6.25%
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| Conversion premium: | 30%
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| Conversion price: | Rs. 200
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| Dividend protection: | Conversion ratios will be adjusted if dividend yield exceeds 1%
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| Call protection: | Non-call 3 years, redemption at 130% in years 4 and 5
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| Conversion price reset: | Conversion price will be reset downwards by up to 10% on Feb. 15, 2008
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| Forced conversion: | After 2 years subject to 120% hurdle
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| Conversion incentives: | 5% additional shares if converted within one year, plus additional 5% if converted within two years
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