By Laura Lutz
Des Moines, May 1 - Watermark Group plc plans to conduct an offer of £8 million of secured fixed-rate convertible bonds due June 4, 2010.
The bonds will bear interest at 15.5% per year, payable semi-annually.
The initial conversion price will be 20p per share, a 17.5% discount to the closing middle-market price of the company's shares on April 30.
Watermark will be able to redeem the bonds in whole, but not in part, at any time after June 4, 2008 if the mid-market closing price of the company's shares is more than twice the applicable conversion price for 30 consecutive days or if the company's EBITDA exceeds the EBITDA target, which is initially set at £6 million.
The bonds may also be redeemed in whole if at least 90% of their original principal amount has already been converted by holders.
The placement will be underwritten by Strategic Equity Capital plc, Strategic Recovery Fund II, SVG Capital plc, North Atlantic Value Fund LLP and Dawnay Day Properties Ltd.
Existing shareholders as of April 30 will also have the option to invest in the offer.
Settlement is expected on June 4.
Proceeds will be used to repay debt owed to Barclays Bank plc, to pay the final deferred cash consideration due under the company's Air Fayre sale and for working capital.
Based in Heston, England, Watermark provides in-flight products, catering and cabin-management services for the airline and travel industries.
| Issuer: | Watermark Group plc
|
| Issue: | Secured fixed-rate convertible bonds
|
| Amount: | £8 million
|
| Maturity: | June 4, 2010
|
| Coupon: | 15.5%
|
| Price: | Par
|
| Yield: | 15.5%
|
| Conversion price: | 20p
|
| Underwriters: | Strategic Equity Capital plc, Strategic Recovery Fund II, SVG Capital plc, North Atlantic Value Fund LLP, Dawnay Day Properties Ltd.
|
| Pricing date: | May 1
|
| Settlement date: | June 4
|
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