Johannesburg - South African furniture maker and retailer Steinhoff plans to sell as much as $631 million of bonds convertible into shares to push out debt maturities, it said on Thursday.
Steinhoff, which operates in Africa, Europe and Australia, is yet to set the conversion price but said this would likely be within a premium range of 30 to 35 percent of the average price its stock traded between the launch and pricing.
The bonds are likely to carry a coupon of between 3.25 percent and 4 percent, payable twice a year.
Shares in Steinhoff dropped 2.9 percent to 45.37 rand by 11:37 SA time, on course for their biggest daily percentage decline in nearly two months, reflecting the dilutive impact of the bonds.
It was not immediately clear how much the bonds would dilute the existing shares if they were all exchanged for Steinhoff shares.
Steinhoff, rated Ba1 by Moody's, said it had granted joint bookrunners an overallotment option of up 65 million euro ($88 million) in addition to the 400 million euros it hopes to raise.
Handling the placing were Citigroup, BNP Paribas and Barclays. - Reuters