By Angela McDaniels
Tacoma, Wash., Jan. 28 - R.E.A. Holdings plc has published a prospectus for its proposed placement of an additional $15 million principal amount of its 7½% dollar notes due 2012/2014, according to a company news release.
R.E.A. already has $30 million of the notes outstanding. They are redeemable in three equal annual installments beginning on Dec. 31, 2012.
Guy Butler Ltd. is the agent.
In addition, 150,000 KCC Resources Ltd. redeemable participating preference shares will be issued with the notes. Investors will receive one $10 preference share for every $100 principal amount of notes purchased.
KCC acts as a subholding company for the R.E.A. group's coal operations.
The preference shares will provide a limited interest in the group's coal operations. The company said that if these operations achieve an average annual EBITDA of $8 million, the combined return to the noteholders will be 15% per year.
However, the company noted that if the required level of earnings is not achieved, then no dividends or other distributions will be paid or made on the preference shares, and they will be converted into valueless deferred shares after Dec. 31, 2014.
The subscription price is $90 per $100 principal amount of notes - plus an amount equal to the interest that will be payable from Jan. 1 up to the date of allotment - and $10 for each preference share.
As a term of the placing, the company has agreed to grant a put option to the noteholders under certain limited circumstances such as divestment of all or a significant part of the coal operations or a change of control of the company.
The placing is conditioned on the admission of the notes to the London Stock Exchange by Feb. 26. The preference shares will not be listed on any stock exchange.
Settlement is expected to occur on Feb. 11.
The proceeds of the notes and preference shares will be used to support the group's coal operations.
London-based R.E.A. Holdings' principal activities are the cultivation of oil palms and the production of crude palm oil in the Indonesian province of East Kalimantan.
| Issuer: | R.E.A. Holdings plc
|
| Issue: | Dollar notes plus redeemable participating preference shares
|
| Amount: | $15 million
|
| Maturity: | Dec. 31, 2014
|
| Coupon: | 7½%
|
| Price: | Par
|
| Put option: | In limited circumstances
|
| Preference shares: | One $10 share for each $100 principal amount of notes
|
| Agent: | Guy Butler Ltd.
|
| Pricing date: | Jan. 28
|
| Settlement date: | Feb. 11
|
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