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Evraz plans to price $600 million five-year convertibles to yield 6.75%-7.25%, up 28%-35%
By Rebecca Melvin
New York, July 8 - Evraz Group SA plans to price $600 million of five-year convertible bonds, which were talked to yield 6.75% to 7.25% with an initial conversion premium of 28% to 35%, according to a news release.
Concurrently Evraz plans to price $300 million in Global Depositary Receipts listed on the London Stock Exchange.
Goldman Sachs International, Morgan Stanley & Co. International and Deutsche Bank AG are joint bookrunners for both offerings. Lazard & Co., Ltd. is a financial adviser for the company.
Proceeds of the offerings are intended to be used to refinance existing debt and for general corporate purposes.
Majority shareholder Lanebrook, with 77.6% of the company's shares, has said it intends to subscribe for about $400 million of the offerings, split about evenly between the bond and equity offerings.
There is a greenshoe of $50 million of convertibles and $15 million of GDRs.
To facilitate the bond issue, Morgan Stanley will offer certain institutional investors the opportunity to borrow ordinary shares represented by GDRs in Evraz during the term of the bonds by means of a stock loan of GDRs beneficially owned by Lanebrook.
Evraz plans to issue new ordinary shares, to be delivered to Lanebrook in the form of GDRs in an amount equal to the number of shares underlying the loaned GDRs, and arrange it so that Evraz will be substituted for Lanebrook as lender of the loaned GDRs.
Evraz plans to list the bonds on the Professional Securities Market of the London Stock Exchange. The GDRs are expected to be listed on the EEA Regulated Market of the London Stock Exchange.
Evraz is a Moscow-based vertically integrated steel and mining concern.
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