Hagemeyer plans redemption of 5.75% convertibles due 2009

By Jennifer Chiou

New York, Dec. 13 - Hagemeyer announced plans to redeem its €149.989 million of 5.75% subordinated convertibles bonds due 2009.

The company intends to notify bondholders no later than Jan. 31 and the redemption date is tentatively March 2.

According to a company news release, the redemption is the result of Hagemeyer shares having traded above €2.65, which is 130% of the conversion price, for at least 20 out of 30 trading days. The conversion price is €2.04.

The company added that based on its share price, bondholders are expected to opt for conversion instead of redemption, resulting in a maximum dilution of about 14%.

On Dec. 1, the company said it waived its right to settle conversions of its two series of convertible bonds in cash, including the 5.75% bonds.

As a result, any conversions will be paid in stock.

The company previously said it has taken this decision because of IFRS accounting rules. Under IFRS, the right to pay in cash means the option elements of the bonds must be classed as liabilities. Fair value adjustments to the option value have to be recorded as net income or expense.

Hagemeyer is a Naarden, Netherlands, supplier of electrical materials and safety and maintenance and repair products.

© 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.