By Susanna Moon
Chicago, June 19 – Ecobank said its shareholders approved issuing up to $400 million of five-year convertible bonds “to strengthen [the] group’s capital position.”
Interest will be Libor plus 646 basis points.
The notes are convertible at an exercise price of $0.06.
The issue was approved at a shareholder meeting on Friday.
Proceeds will be used to repay the bridge financing “required to create a resolution vehicle to manage Ecobank’s legacy loan portfolio and to optimize the maturities of the group’s debt portfolio,” according to a bank announcement.
“We are delighted with the strength of the support shown for the issue by our existing shareholders, as it vindicates the vigorous action taken to address our challenged legacy assets, as well as indicating their confidence in Ecobank’s future,” Ecobank’s group chairman, Emmanuel Ikazaboh, said in the press release.
“Nevertheless, it is a matter of great regret that the board was unable to recommend the payment of a dividend in respect of 2016,” he added. “Ecobank’s senior management is united in its firm resolve to work urgently, yet diligently, to reinstate cash dividends as soon as ETI’s financial position permits.”
Ecobank is based in Lomeì, Togo. The bank’s parent company, Ecobank Transnational Inc., is a pan-African banking group.
| Issuer: | Ecobank
|
| Issue: | Convertible bonds
|
| Amount: | $400 million
|
| Maturity: | Five years
|
| Coupon: | Libor plus 646 bps
|
| Conversion price: | $0.06
|
| Announcement date: | June 19
|
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