AusGroup receives tenders for S$5.30 million 7.95% notes in exchange

New York, Sept. 28 – AusGroup Ltd. said it received tenders for S$5,299,800, or 6.79%, of its S$110 million of 7.95% notes due 2018 in its offer to exchange those notes for shares.

The total exchange consideration is S$5,310,189.06 and the company will issue 91,554,980 shares, according to an announcement.

Settlement is planned for Sept. 29.

The offer was announced on Sept. 11 and ended at 5 a.m. ET on Sept. 28.

AusGroup was offering to issue up to 95,716,570 new shares in exchange for up to S$5,540,700 principal amount of notes.

The exchange value will be a number of new shares equivalent to the sum of the aggregate principal amount of notes exchanged plus accrued interest up to but excluding the settlement date, based on the issue price of S$0.058 per share, which is a premium of about 17.9% above the volume-weighted average price of S$0.0492 per share for trades on the SGX-ST over the 30 market days preceding the announcement date The new shares will be traded on the exchange.

The issue price of S$0.058 represents a premium of 21.8% over the volume-weighted average price of S$0.0476 per share on Sept. 7.

The exchange value is 4,161,590 new shares per note.

The exchange offer is conditioned on the receipt of tenders for at least 10 notes.

“Following from the company’s transition in relation to the maintenance business and the resolution of approvals for the port, the company is now able to explore various business opportunities, such as organic growth or a realization of certain of its assets or business units,” according to a company announcement.

“The purpose of the exchange offer is to build on the success of the company’s business restructuring, and includes the following commercial objectives:

• To improve the company’s net asset position on its balance sheet by reducing debt and increasing paid-up capital;

• To reduce interest costs as a result of reduced debt;

• To improve the company’s ability to raise funds from financial markets due to a healthier balance sheet;

• To improve the company’s ability to win new contracts from potential customers; and

• To improve the perception and confidence of the company’s customers, suppliers, employees and other stakeholders.”

Because of depressed oil and commodity prices, those sector companies have reduced capital spending and are shifting into operating spending with dominant maintenance expenses, the company noted.

As a result, the company has restructured its business to move to operational expenditure and maintenance services in the energy, industrial and mining sectors from servicing capital expenditure expansion in the mining sector.

In the recent exchange, the company issued 482,849,304 new shares on June 30 in exchange for 7.95% notes.

The issue price was S$0.058, or a premium of about 6.62% above the volume-weighted average price of S$0.054 per share from the last trading day of May 18 and a premium of about 6.03% above the volume-weighted average price of S$0.0547 per share for share trades completed over the previous 30 market days from the announcement on May 21.

That exchange offer began May 22.

West Perth, Australia-based AusGroup is the parent company of AusGroup Singapore Pte. Ltd.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.