South African computer networking group Dimension Data said on Tuesday it had agreed to issue a $100-million seven-year convertible bond to investment holding company Venfin Ltd.
”If converted, the bond would provide Venfin with an equity holding equivalent to about 12,3% of the enlarged fully diluted share capital of Dimension Data,” Didata said in a statement issued before the market opened.
Didata said it had enough cash resources to meet existing commitments but the subscription would provide the group with greater flexibility to manage its cash resources after the repayment of existing convertible debentures at year-end.
There had been no change to the market update and guidance Didata issued on August 20, and the group would remain cash flow positive in the year ahead, it said.
Based on agreed terms, the bond would carry a coupon of 5,375% and would be convertible at 53,17 US cents per share — which amounted to 34,075 pence at a fixed exchange rate of $1,56 to the pound.
The issue would be unlisted and if not previously redeemed or converted into shares, would be redeemed at 103,12% of its principal amount in 2009.
Venfin had also indicated it may purchase ordinary shares of Didata in the market but would not do so before a circular on the deal was posted to shareholders, Didata said.
Venfin said it and any party acting on its behalf would not acquire shares exceeding the equivalent of 25% of the enlarged share capital of Didata assuming the bond was fully converted.
Didata expected to issue its preliminary results for the year ended September 30 on November 21. – Reuters