Tycoon Henry Sy-led conglomerate SM Investments Corp. plans to redeem $250 million worth of convertible bonds ahead of their 2017 maturity as part of its debt management program.
SMIC is exercising its right to call or redeem the 1.625-percent a year five-year convertible bonds by April 19 this year, the conglomerate disclosed to the Philippine Stock Exchange (PSE) Friday.
The conglomerate intends to redeem all the bonds at a redemption price equal to 104.127 percent of the principal amount of all outstanding bonds plus accrued and unpaid interest calculated from and including Feb. 15 this year.
Bondholders wishing to avoid having their bonds redeemed have until April 9 to convert these bonds, the disclosure said. If all bondholders elect to convert their bonds, a total of 2.3 million common shares of the company will be issued upon conversion of the bonds representing 0.284 percent of the company’s existing common share capital as of March 19 and 0.283 percent of common stocks.
The conversion price for the bonds is P624.625 a share. SMIC shares closed at P902 a share yesterday.
The company intends to complete the delisting of the bonds from the Singapore Stock Exchange as soon as possible following the redemption of the outstanding bonds on April 19.
SMIC issued the five-year $250-million convertible bonds in 2012 and featured the lowest ever yield for a Philippine corporate issue of any maturity at the time. The transaction provided SMIC with attractive, low-cost financing while achieving a conversion price at a premium to the share price. Doris C. Dumlao