China Milk - US$3m principal amount to be repurchased

The tender for the bond repurchase has closed. The final aggregate principal repurchase amount is US$3m, so that the remaining principal of the bond will become US$147m. The clearing price expressed as a percentage of the denomination of the tendered bonds is 95%. Based on that price, the aggregate repurchase amount in cash payable is US$2.85m.

The repurchase amount would translate into about Rmb20m, which is quite insignificant relative to CMILK's Rmb1.9b cash position or its Rmb1b convertible bonds (CB) balance as of 31 Dec 08.

The company is willing to pay up to US$40m for the repurchase, but has received far from enough applications. The CB could be converted into new shares at a conversion price of S$2.00, or be redeemed by the company at 129.58% of the principal at maturity date. The bondholders seem to be at least quite confident about CMILK's repayment ability and are reluctant to sell the bonds at a discount now.

Sponsored Links