Moulin cancels $320m bond sale
Eyewear firm Moulin Global Eyecare Holdings has scrapped a convertible bond issue that was to have paid off debts stemming from the $450 million acquisition of the second-largest optical retail chain in the United States.
It is the second time the group, formerly known as Moulin International Holdings, has shelved fund-raising plans this year.
In February, Moulin scrapped an attempt to raise $520 million through a top-up placement of 80 million shares at $6.20 to $6.50 each when the offer, jointly led by Cazenove and Citigroup, failed to draw sufficient interest from investors, who baulked at the offer price.
The latest setback involved five-year convertible bonds worth about $320.5 million, which would have given a semi-annual coupon of 1.94 per cent and a yield to maturity of 6.9 per cent. The deadline for the offer was yesterday.
No official reason was given for the shelving, but analysts said the issue had failed to attract enough interest from traders amid concern about the company's high gear ratio.
'The group has earlier acquired some European companies. Also, it has plans for an acquisition on the mainland. Traders are worried that Moulin will have little cash on hand,' Tung Tai Securities associate research director Kenny Tang Sing-hing said.
He added Moulin would have limited choices for raising funds again.
Analysts said funds from the bond issue were mainly to be used to pay for bank loans for the acquisition of Eye Care Centres of America (ECCA), which operates 378 stores in the US.
Moulin completed its acquisition of a majority of shareholding interest of ECCA last month.
In July last year, Moulin lost its battle for US eyewear retailer Cole National Corp after shareholders accepted an offer from rival bidder Luxottica, the world's largest eyewear firm - 78 per cent of Cole shareholders voted to accept Luxottica's sweetened US$495 million, or US$27.50 per share, takeover offer.
Trading in the group's shares was suspended on Monday and yesterday. The stock last closed at $5.05.
Moulin officials were not available for comment last night.
The company changed its auditors late last year from Ernst & Young to Deloitte Touche Tohmatsu. The group has also postponed a board meeting to approve its 2004 annual results last week until further notice.
