Sound Global: Stock likely to see renewed trading interest as company proposes to issue RMB 680m USD convertible bonds due 2015 with 6% interest rate pa, with upsize option for additional RMB 205m CBs. Conversion price set at $0.924/sh, 20% premium to last traded price at $0.77. Maximum possible dilution is 12%, assuming full share conversion…
The CB issue provides Sound Global an alternative means of raising capital, after a previous failed attempt to list new shares (at up to $1/sh) in the proposed HK dual listing. Proceeds likely to be used to support the company’s expansion plans in the capital intensive BOT project segment. However, we note the slightly higher cost of funds that Sound Global is now incurring, compared to its original proposal.
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