China Mengniu sells bonds to pay its debts
The bond sale which will raise funds to pay off debts, is a twist in Mengniu’s earlier plan to buy out Modern Dairy in a bid to edge out rival Yili Industrial
China Mengniu Dairy, the country’s second largest dairy company, said it would issue exchangeable bonds worth US$194.8 million that could be exchanged for shares of China Modern Dairy.
If the bonds are fully exchanged into the shares, it will represent 11.24 per cent of issued capital of the dairy farm operator that controls China’s largest cattle herd, according to a filing to the Hong Kong stock exchange on Friday.
“[The] Company intends to use net proceeds of issue of bonds to refinance certain of its existing indebtedness,”the Inner Mongolia-based company said in a filing.
The issue price, at HK$2.20 per share, represents a 33 per cent premium to China Modern’s previous closing price.
