Naspers to discuss bond of up to $1-billion for deals
Naspers, which has stakes in China’s Tencent Holdings and Russia’s mail.ru Group, is considering selling as much as $1-billion in debt to fund acquisitions, according to three people familiar with the talks but who asked not to be identified because the talks were private.
Naspers began a bond road show on July 8 to gauge investor appetite for debt sold by its unit Myriad International Holdings. The company, based in Cape Town, is expanding its Internet business through acquisitions to take advantage of fast-growing emerging markets. Naspers will use the proceeds for “future acquisitions and the repayment of existing credit facilities,” the company said in a July 2 filing.
Meloy Horn, the head of investor relations for Naspers, declined to comment.
In particular, Naspers plans to add to its portfolio of overseas assets.
These include a 34% stake in Tencent, China’s biggest Internet company, and 29% of Russian social-media and gaming provider Mail.ru. The company already has enough debt capacity for $500-million of acquisitions, chief financial officer Steve Pacak said in a June 25 telephone interview.
Naspers was one of three investors in a $200-million funding round for Flipkart Online Services, the Indian online retailer said yesterday. The stock gained as much as 3.5% and increased 1.6% to R769.56 as of 10:29am in Johannesburg trading on Thursday , the highest since September 1994.
Naspers has gained 42% this year, the second-best performer after Mondi Group in the FTSE/JSE Africa Top40 index of South Africa’s largest companies, which has increased 3.2%.
Naspers is the latest South African company to consider raising debt. Eskom Holdings needs to plug a R191-billion ($19-billion) funding gap to avert a repeat of blackouts that closed mines and factories for the country’s main electricity provider in 2008.
Transet plans to sell as much as $1-billion by the year-end in the country’s first rand bond to foreign investors, the state-owned ports and rail operator’s cheif executive office said this month.
Naspers has a long-term debt rating of Baa3 with a stable outlook, according to Moody’s Investors Service. That’s the lowest investment grade as defined by the New York-based ratings firm. It had cash and cash equivalents of R15.8-billion for the year ending March compared with R9.8-billion a year earlier.– Bloomberg