RPC Rs. 3.5 b debenture issue draws over Rs. 11 b demand
Tuesday, 13 May 2014 00:24
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Richard Pieris and Company PLC’s (RPC) Rs. 3.5 billion debenture issue has received strong demand with an oversubscription of three times.
The company announced yesterday that its issue of 35 million AA- Rated, Unsecured, Redeemable Debentures, drew 166 applications requesting for Rs. 11.13 billion worth of debentures.
The issue was 30 million debentures at Rs. 100 each with an option to upside it to 35 million in the event of oversubscription of the original figure.
Option A had drawn the biggest demand with Rs. 5.7 billion via 73 applications. Option C attracted 57 applications worth Rs. 3.3 billion and Option B attracted 36 applications worth Rs. 2 billion.
Type A entailed 10.75% interest rate per annum payable semi-annually (Annual Effective Rate 11.04%), Type B was 11% with an AER of 11.30% and Type C was 11.25% (AER of 11.25%).
RPC intends to use funds raised to convert a portion of its floating rate borrowings to fixed rate. Currently all of the company’s bank borrowings comprise of floating rate borrowings mainly linked to the AWPLR.
RPC will be utilising up to a maximum of Rs. 3.5 billion of the funds raised through the debenture issue to repay some of these existing bank borrowings and restructure the balance sheet to have a combination of both fixed rate and floating rate borrowings. This will enable the company to be in a better position to hedge against fluctuations in market interest rates in the medium term.
Financial advisors and managers to the issue was NDB Investment Bank and the joint placement agents were NDB Investment Bank and Arpico Ataraxia Asset Management Ltd.
