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Colombia's Petrominerales begins tender offer for 2.625% convertibles
By Angela McDaniels
Tacoma, Wash., May 31 - Petrominerales Ltd. is offering to buy back up to $275 million of its $521.8 million of 2.625% senior convertible bonds due 2016 from certain offshore holders, according to a company news release.
The purchase price range is $95,000 to $100,00 per $100,000 principal amount of convertibles. The price will be determined via a modified Dutch auction procedure.
Bondholders can submit either competitive offers specifying the price the bondholder would be willing to accept or non-competitive offers that do not specify a price.
All bondholders whose offers are accepted by Petrominerales will be entitled to the same purchase price, which will determined at the discretion of the company.
Holders may submit offers until 9:30 a.m. ET on June 1.
The company will also price $400 million principal amount of new senior convertible bonds due 2017. In the tender offer, preference will be given to the holders of the existing convertible switching into the new convertibles.
The new convertibles are expected to have a coupon in the range of 2.875% to 3.625% and a conversion premium of 32.5% to 37.5% over May 31's closing share price, which was C$13.80 (Toronto: PMG).
The new convertibles will be issued at par and are expected to be issued on June 12.
The completion of the offering and of the tender offer is conditioned on the receipt of tenders for at least $150 million principal amount of existing convertibles, and the tender offer is conditioned on the successful offering of the new convertibles.
As part of issuing the new convertibles, Petrominerales said it will repurchase and cancel between 5 and 7 million common shares from some offshore holders at the May 31 closing stock price.
ABG Sundal Collier Norge ASA is the manager for both the tender offer and the new issue.
Petrominerales is an oil and gas company based in Bogota, Colombia.
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