5th Sep 2013 07:30
LONDON (Alliance News) - Enterprise Inns PLC Thursday launched a GBP100 million convertible bond offering that will allow it to slow the rate of pub disposals and mean it doesn't have to draw down a more expensive funding facility.
The pub operator said it would offer senior, unsecured guaranteed convertible bonds due in 2020.
The offering will allow Enterprise to reduce the current level of pub disposals, focusing on the disposal of under-performing assets and maximising returns for shareholders by the reinvestment of disposal proceeds into trade-generating capital expenditure schemes designed to drive like-for-like growth across the business," the company said in a statement.
It said that as a result of the offering it wouldn't have to draw down a GBP70 million tranche on its Forward Start facility, which carries an interest rate of 5% to 6.5% over LIBOR. That will reduce its overall bank facility to GBP150 million, which will amortise to GBP75 million on its maturity in June 2016, it added.
"During the past four years, we have reduced the overall level of debt by over GBP1 billion, partly funded by cash generated from operations and the balance through disposals," Chief Executive Ted Tuppen said in a statement. "As the quality of our pubs has improved, we have also moved towards delivering like-for-like income growth across the whole estate. The offering will bring to an end the use of disposal proceeds for debt reduction and allow us to drive real growth in the business."
The company's shares were down 3.6% at 140.7 pence early Thursday, the biggest decliner on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
ETI.L