Industrea to repay all A$40.4 million convertibles, get debt facility

By Marisa Wong

Madison, Wis., Sept. 28 - Industrea Ltd. has agreed with its bondholders to repay all A$40.4 million of outstanding convertible bonds, according to a company news release.

The company said repayment of the bonds will simplify its capital structure and remove the risk of potential future dilution for its shareholders.

The convertible bonds were issued in February 2008 as part of the funding for the acquisition of Huddy's Mining Services business. In March 2010 Industrea began to simplify its capital structure by buying back A$17.8 million of convertible bonds using cash reserves. The repayment of the remaining bonds completes the process.

Industrea said it will repay A$35.8 million worth of bonds at a fixed price of A$0.44 per share, avoiding the potential uncertainty of a calculated forward volume weighted average price.

The remaining A$4.6 million worth of bonds will be converted into Industrea shares at the existing conversion price of A$0.39 per share.

The repayment will be supported by a new A$40.4 million debt facility from a member of the syndicate of lenders.

The debt facility extension results in the bonds' liability becoming term bullet debt following draw down of the facility to repay the bonds.

The new facility streamlines the company's capital structure and provides a strong base for future growth, Industrea managing director and chief executive officer Robin Levison said in the release.

"We recently indicated we were considering alternatives to repay the outstanding convertible bonds. I am delighted we have now reached agreement with our bondholders, supported by the syndicate of banks that currently provides Industrea's existing senior debt facility.

"Market feedback to date has shown many view the perceived overhang created by the convertible bonds as restricting the Industrea share price from truly reflecting the fundamental value of the business. Removing the potential overhang is an important part of Industrea's capital management strategy, and will have no net increase in our net debt position."

The transactions are due to be completed on Oct. 4.

Industrea is a mining products and services provider based in Brisbane, Australia.

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