Core Projects launches US$60 million FCCB issue

Core Projects & Technologies Ltd has announced that the Company announces the Launch of US$60 million Foreign Currency Convertible Bonds for strategic acquisitions and capital expenditure needs.

The Company on May 04, 2007 announces the launch of US$60 million unsubordinated unsecured foreign currency convertible bonds due 2012 (the "Bonds"). In addition, the Lead Manager has an option to increase the issue size by an additional US$20 million. Given the favourable market conditions, the Company has decided to issue the Bonds for capital expenditure and other uses subject to applicable Indian laws. The Bonds will be convertible into the Company ordinary shares, quoted in Indian Rupees ("Rs.").

The Bonds are expected to be zero coupon, carry a yield to maturity of 7.25% to 7.75% per annum and the conversion price is expected to be set at a premium of 40% over the closing share price of Rs 591.85 of the Company on the Bombay Stock Exchange on May 03, 2007. The initial conversion price is fixed at Rs 828.59 per share ("Initial Conversion Price") in accordance with the relevant pricing norms prescribed by the Ministry of Finance, Government of India.

Bonds also carry a reset feature. The reset feature will become active on three reset dates - May 11, 2008, November 11, 2008 and May 11, 2009.

On a Reset Date, if the average closing price of the share for the preceding 15-day period (the "Reset Reference Price") is less than the Initial Conversion Price converted into US Dollars at the Fixed Exchange Rate of US$1 = Rs 40.82, then the Initial Conversion Price will be reset to the average closing price of the shares over the preceding 15 day period.

However any adjustment to the conversion price pursuant to the conversion price reset will be limited so that the adjusted conversion price will not be less than 70% of the Initial Conversion Price for the May 11, 2008 Reset Date, 50% of the Initial Conversion Price for the November 11, 2008 Reset Date and 40% of the Initial Conversion Price for the May 11, 2009 Reset Date. It is to be noted that any adjustments shall only be downward adjustments and an adjustment may be made in respect of a subsequent Reset Date notwithstanding that an adjustment may have been made in respect of an earlier Reset Date.

The Bonds will be issued at par and redeemed at 142.80% to 146.29% of par on maturity. The Company has the right to redeem all outstanding Bonds at their accreted principal amount on or after May 11, 2010 if the parity of the Bonds (in US$ terms) trades for each of 30 consecutive trading days before May 11, 2010 at 130% or more of the accreted principal amount. Bondholders will also have an early redemption option on May 11, 2010.

The Bonds are expected to be priced today and closing is expected on or about May 11, 2007. Application has been made for the Bonds to be listed on the Stock Exchange of Singapore and the Singapore Stock Exchange has given in-principal approval for the listing of the Bonds. Citigroup Global Markets is the Sole Bookrunner and Lead Manager for the offering.

Source : Equity Bulls

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