By Susanna Moon
Chicago, Nov. 21 – R.E.A. Holdings plc will issue $14,035,218 principal amount of new 7½% notes due 2022 in exchange for its 7½% notes due 2017.
REA Services has subscribed for another $10 million principal amount of the new dollar notes under the placement, bringing the total new issue amount to $24,035,218, according to a company update.
The exchange amount include applications under the top-up option for $225,000 of new dollar notes by holders of the existing dollar notes with less than $120,000 principal amount.
The company had originally said on Monday that investors had tendered for exchange $13,810,218 of notes with another $135,000 of notes under the top-up option and then issued a corrected update later in the day.
As announced Nov. 7, the company was offering to issue up to $37.5 million principal amount of new 7½% notes due 2022 in exchange for its 7½% notes due 2017.
To the extent that the offer was not fully subscribed, R.E.A. had planned to place up to $10 million of new dollar notes with its wholly owned subsidiary R.E.A. Services Ltd. with the intention of selling notes over time to third-party purchasers.
The group is looking to refinance its major debt due 2017, $34,011,003 principal amount of dollar notes due June 30, 2017 and £8,324,000 principal amount of 9½% notes issued in 2015 and due Dec. 31, 2017.
In the exchange, the company was offering $120,000 principal amount of new dollar notes plus $300 in cash for each $120,000 principal amount of existing dollar notes.
Holders also would pay accrued interest in cash on $120,000 principal amount of existing dollar notes as of the date on which the exchange becomes unconditional.
The exchange was contingent on receiving offers by Nov. 21 or at the latest by Dec. 29 for at least $10 million principal amount of existing dollar notes.
The exchange offer included a top-up option exercisable by holders whose registered holding as of Nov. 4 was less than $120,000 principal amount of notes, a previous release noted.
The new dollar notes would have substantially the same terms as those of the existing notes except for the redemption date and that the new notes would be issued and transferable in minimum denominations of $120,000 and in integrals of $1 after that.
Guy Butler Ltd. is the agent.
The company said it expects to apply to list the notes to begin trading on the London Stock Exchange on Nov. 23 with settlement on Nov. 24.
All conditions of the issue other than admission have been satisfied.
The company said it is seeking to defer debt repayments until after its extension planting program has been completed. As the company’s capital spending falls into the 2020s and its operations “mature,” the gradually higher cash flows can be used to repay debt.
“Given the prospective maturity during 2017 of a significant proportion of the group's dollar and sterling notes and the current momentum in the group's extension planting program, further funding would be required,” the company said in the press release.
“The company has been considering several financing alternatives designed to meet the group's requirements and, in particular, to defer debt repayments until after the extension planting program has been completed.”
London-based R.E.A. is engaged in the cultivation of oil palms and the production of crude palm oil and crude palm kernel oil in the Indonesian province of East Kalimantan.
New issue
| Issuer: | R.E.A. Holdings plc
|
| Issue: | Notes
|
| Amount: | $14,035,218
|
| Maturity: | 2022
|
| Coupon: | 7½%
|
| Settlement date: | Nov. 24
|
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