By Kenneth Lim
Boston, March 7 - Hong Kong-based Techpacific Capital Ltd. is offering $75 million of five-year zero-coupon bonds that are exchangeable for shares from its existing stake in Crosby Capital Partners at 99.75p apiece, or for new Techpacific shares.
Goldman Sachs International is the bookrunner for the deal.
The exchange price of 99.75p represents a 1.79% premium over Crosby's 98p closing price on Monday in London's Alternative Investment Market. Techpacific's stock on the Hong Kong stock exchange was suspended on Monday and Tuesday, and last traded at HK$0.75 on Friday.
Techpacific will redeem the bonds at 116.1% of the principal amount on maturity for a yield of 3%.
Bondholders may not exchange the convertibles for new Techpacific shares if more than 559 million Techpacific shares have already been issued to the bondholders. The conversion premium for Techpacific shares is about 38% above Techpacific's latest stock price.
Exchanges for Crosby shares will not be allowed if more than 33.5 million shares have already been exchanged, but Techpacific is seeking shareholder approval to raise the limit to just under 42.95 million Crosby shares.
Techpacific currently holds 81.24% of Crosby's shares. The 33.5 million shares represents 13.8% of Crosby's current share capital.
Techpacific, an investment banking and private-equity fund management group, will use the proceeds of the deal for working capital and to make investments in the oil and gas exploration sector. It carries out its investment banking activities through Crosby.
| Issuer: | Techpacific Capital Ltd.
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| Issue: | Exchangeable bonds
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| Underlying stock: | Crosby Capital Partners (up to 33.5 million shares, or 42.95 million or shareholder approval), Techpacific (up to 559 million shares)
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| Bookrunner: | Goldman Sachs International
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| Amount: | $75 million
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| Maturity: | March 8, 2011
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| Coupon: | 0%
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| Price: | Par
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| Redemption price: | 116.1
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| Yield: | 3%
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| Conversion premium: | 38% over Techpacific's stock price, 1.79% over Crosby's stock price
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| Conversion price: | About HK$1.04 for Techpacific stock
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| Exchange price: | 99.75p for Crosby stock
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| Pricing date: | March 7
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