Fu Ji Food, Hang Fung Gold sell bonds to raise total of US$370m
Fu Ji Food & Catering Services Holdings, which sells cooked meals in Shanghai, is raising as much as US$200 million from selling convertible bonds for expansion, according to a term sheet sent to investors.
Upon the bonds maturing in three years, investors can convert them into shares when they are expected to gain 30 per cent to HK$32.83 from the deal's reference price of HK$25.25.
The bond offers no interest payments but if its holders hold the securities to maturity, they will earn as much as 3.38 per cent in interest annually. Citi is arranging the sale.
Fu Ji shares have risen 85 per cent since this time last year, outpacing the 63 per cent gain in the Hang Seng Index.
SBI E2-Capital analyst Ada Chua set the target price at HK$30.10 on the stock a week ago and maintained a 'buy' recommendation.
The convertible bond sale will be the company's second in about a year after it raised US$128 million from the capital market in October last year.
Fu Ji Food said in February that its nine-month profit rose 50.5 per cent to 275 million yuan. Revenue rose 57.4 per cent to 866 million yuan from a year earlier.
The company offers institutional in-house catering, event-related catering and meal-delivery service.
Meanwhile, Hang Fung Gold Technology, a Hong Kong jewellery manufacturer cum retailer, raised US$170 million from the sale of seven year-bonds yielding 9.25 per cent.
Arranged by HSBC, the bond sale originally sought US$150 million but was upsized by US$20 million after attracting orders of US$270 million, a source said.
Asian investors took 69 per cent of the bonds on sale while Europe bought the rest. Fund managers took 56 per cent, banks took 32 per cent and pension funds and insurance companies took the remainder.
The bonds are guaranteed by Hang Fung subsidiaries. Moody's gave it a Ba3 rating, three steps below investment grade.