Prosus prices three tranche bonds for R58bn to raise funds
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PROSUS, the international internet assets division of South African multinational Naspers, said yesterday that it had priced three tranche bonds for an aggregate principal amount totalling $4 billion (R57.3 billion) amid a favourable market backdrop to raise funds for general corporate purposes.
The group said these issuances consist of $1.85bn 3.06 percent notes due in 2031, €1bn (R17bn) 1.29 percent notes due in 2029 and €850 million 1.99 percent notes due in 2033.
The group said the current favourable market backdrop enabled Prosus to extend its debt maturity profile as part of a refinancing of its existing debt.
“The purpose of the offerings is to raise proceeds for general corporate purposes, including debt refinancing, which may take the form of redemptions, repayments at maturity, tender offers, repurchases or other transactions,” the group said.
Prosus expected this financing to be ratings neutral and it remained committed to an investment grade credit rating, as its management believed this to be important in providing the group with debt capital market access at attractive rates, it said. The offerings were expected to close on July 13.
Prosus has made applications to the Irish Stock Exchange plc, trading as Euronext Dublin, for the bonds to be admitted to listing on the official list and traded on the global exchange market of Euronext Dublin.
Prosus, which was spun off from Naspers in 2019, has been investing in companies with growth potential around the globe.
In May Prosus and Naspers announced a share swop deal in another step in the long journey of narrowing the discount that they trade at relative to the value of their shareholding in Chinese tech giant Tencent.
Prosus was set to acquire 45.4 percent of Naspers N shares in exchange for newly issued Prosus N shares in an attempt to close the gap between the underlying value of its assets and market value. The groups expected the transaction to be implemented in the third quarter.
Vaughan Henkel, the head of equity research at PSG Wealth, said both Prosus and Naspers shares have been under pressure since their last report in December, partly due to management’s proposal for Prosus to acquire part of Naspers.
“The underperformance to Tencent has resulted in a widening of the discount
to NAV. While these discounts to NAV seem attractive at face value, it must be viewed considering the pending cross-holding transaction where Prosus will acquire 45.4 percent of Naspers, bringing their stake to 49 percent,” Henkel said.
He added that, if approved and implemented, they think the transaction would be difficult to reverse and would fail to reduce the discount.
Prosus’s share price dropped 3.81 percent to close at R1 299.25 on the JSE yesterday.