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City Infrastructure JSC sells $40m bond

Update: November, 25/2016 - 09:45

Sài Gòn Bridge, developed by HCM City Infrastructure Investment JSC. The company is entitled to redeem bonds from the third year of the sale. — VNA/VNS Photo An Hiếu 

HÀ NỘI – HCM City Infrastructure Investment JSC yesterday signed a contract to sell US$40 million worth of convertible bonds to KEB Hana Banktrustee and Custodian Business, the first tranche in its plan to issue $60 million in bonds to raise funds for its projects, the HCM Stock Exchange-listed company announced.

These non-guaranteed, five-year bonds yield 1 per cent per year with the face value of $100,000.

Under the contract, the infrastructure developer is entitled to redeem bonds from the third year of the sale onwards but the buyback amount cannot exceed 50 per cent of the total bond issuance.

The conversion price is set at VNĐ38,500 ($1.71) per share, equivalent to 130 per cent of the CII’s closing price on November 23. The exchange rate used for the conversion is the average value of buying and selling prices of US dollar by Vietinbank on the same day.

Bondholders have the right to extend the bond’s maturity for another five years and the conversion price from the sixth year will increase by 10 per cent over the previous year.

CII’s shares have climbed nearly 41 per cent this year, ending yesterday at VNĐ29,700 a share on the HCM Stock Exchange.

The bond issuance is aimed to raise investment capital for the company’s projects. CII plans to issue non-guaranteed convertible bonds worth a maximum value of $60 million to Korean investors.

The first investor is Hana KEB Banktrustee and Custodian Business, a custodian of Rhinos Asset Management Co Ltd (RAM). The South Korean investment fund manages a $1.2 billion portfolio, focused on convertible bonds in developed markets like the United States, Japan, Hong Kong and Europe.

At the company’s extraordinary shareholders’ meeting in October this year, CII said besides ongoing works, it was aiming at larger infrastructure projects with total investment capital of over $100 million such as Hà Nội Highway BOT project valued at $260 million, Trung Lương – Mỹ Thuận Expressway worth $650 million and Skyway Stage 1 project worth $900 million in HCM City.

The proceeds from this bond issuance are expected to finance the Thủ Thiêm Infrastructure Development project which has total investment cost of VNĐ2.64 trillion ($117.4 million).

The company is planning to hold another extraordinary shareholders’ meeting to discuss the appointment of one member from the Korean fund in its managing board, as well as the reduction of ownership in CII Engineering and Construction (CII E&C) and Tân Hiệp Water Investment JSC. – VNS


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