14th Nov 2014 07:26
LONDON (Alliance News) - J Sainsbury PLC Friday said it has launched an offering of around GBP400 million convertible bonds due 2019, part of the proceeds of which it said will be used to refinance the supermarket's acquistion of full ownership of Sainsbury's Bank earlier this year.
"The proceeds will be used to refinance Sainsbury's GBP190 million convertible bonds redeemed in July 2014 and part refinance the GBP248 million acquisition of the remaining 50% of Sainsbury's Bank not already owned, which completed in January," the retailer said.
Sainsbury's bought the 50% stake back from Lloyds Banking Group PLC.
Sainsbury's, the UK's third-largest supermarket chain by market share, said the bonds will be convertible into fully paid new or existing shares, and are expected to have a coupon in the range of 1.00% to 1.75% per year. The expected initial conversion price will be at a premium of 30-35% to the volume-weighted average price of Sainsbury shares between launch and pricing, it said.
Earlier this week, Sainsbury's said it will cut costs and capital expenditure so that it can invest more in pricing, as it swung to a pretax loss in the first half of the year and revealed the extent of its struggles with the price war engulfing the UK supermarket sector.
UBS and BNP Paribas are joint bookrunners on the bond offering.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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