By Abigail W. Adams
Portland, Me., Dec. 4 – Eros International Plc has issued $122.5 million in convertible notes due 2020 to yield 0% with an initial conversion premium of 15% at a discounted offering price of $100 million.
The offering was sold as a registered direct placement.
Due to the discount, the notes will not bear interest except in the event of a default, in which case the notes will yield 6%, according to the deal’s prospectus.
The notes will be issued alongside warrants for 2 million of the company’s A ordinary shares with a strike price of $14.375, which is subject to adjustment. Eros is also offering 10,340,426 A ordinary shares issuable upon conversion of the securities or otherwise, according to the prospectus.
The conversion price is $14.6875.
The notes are callable on or after Dec. 6, 2019 if the company’s A ordinary shares exceed $18.3594 for 10 consecutive trading days and there has been no failure to satisfy existing equity conditions.
Holders may force redemption in the event of a default. The alternate conversion price in such an event is the lower of either the current conversion price or 80% of the lowest stock price on any 5 trading days prior to the notice of conversion, according to the prospectus.
Upon a bankruptcy default event, Eros will settle in cash with the holders of the notes an amount representing 110% of the outstanding principal.
Eros will make an installment payment once a month of the amortizing total of the principal of the notes totaling $3.5 million.
The warrants expire six months from their issuance. There is a blocker provision prohibiting the exercise of the warrant if the holder or their affiliates would own in excess of 4.99% of the company’s outstanding A ordinary shares.
The prospectus for the deal also covers the A ordinary shares issuable upon exercise of the warrants. The share capital available for issue is £30,000,000 divided into 100 million ordinary shares, which the company can designate either A or B ordinary shares.
Eros may not issue more than 13,712,715 B ordinary shares.
The notes and warrants will not be traded on any securities exchange or automated quotation system.
Eros anticipates $99 million in proceeds from the offering which will be used to pay down outstanding debt under the revolving credit loan facility and for general corporate purposes.
Eros is a Mumbai, India-based Indian film entertainment company.
| Issuer: | Eros International Plc
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| Securities: | Convertible senior notes
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| Amount: | $122.5 million
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| Maturity: | Dec. 6, 2020
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| Coupon: | 0%
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| Price: | $100 million
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| Conversion premium: | 15%
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| Conversion price: | $14.6875
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| Call options: | Non-callable until Dec. 6, 2019, provisionally callable if A ordinary shares exceed $18.3594 (125% hurdle) for 10 consecutive trading days
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| Put options: | In event of default
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| Pricing date: | Dec. 4
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| Settlement date: | Dec. 6
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| Warrants: | For 2 million shares
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| Warrant expiration: | Six months
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| Warrant strike price: | $14.375
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| Stock symbol: | NYSE: EROS
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| Stock price: | $12.75 as of Dec. 1 close
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| Market capitalization: | $777.64 million
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