Wednesday, April 30, 2014
CNA: CNA’s share price surged ~20% after the group announced that it has entered into a bond subscription agreement with Pacific Alliance Asia Opportunity Fund (the subscriber), under which subjected to certain terms and conditions, CNA will issue up to $120m worth of redeemable zero coupon convertible bonds in two different series to the subscriber. The first series of Bonds (Initial Bonds) will be issued in two separate successive tranches, while the second series of Bonds (Subsequent Bonds) will be issued in up to 58 separate successive tranches, each tranche having an aggregate principal amount of $2m which may be converted into ordinary shares in the company. The right of a bondholder to convert any Bond into Shares may be exercised, at the option of the holder at any time on and after the date of issue of the Bonds, which has a tenure of five years. The bonds shall be converted into new shares in accordance with the lower of either of the following formulae: i) 125% of the average of the closing prices quoted by SGX for the 15 consecutive trading days before the date of issue of the Bond; and ii) 90% of the lowest average closing prices quoted by SGX for any five consecutive trading day period in the 15 consecutive trading days immediately preceding the conversion date. Provided that if either i) or ii) above is less than the minimum conversion price of $100,000, the initial conversion price shall be the minimum conversion price. The estimated net proceeds from the issuance of the Bonds, assuming full subscription of all the Bonds, is ~$115.7m. It is the intention of the company and the subscriber to issue and subscribe for at least the Initial Bonds and the Subsequent Bonds comprising the Subscriber Option Tranches. Subject to the terms of the bond subscription agreement, the company will raise gross proceeds of $20m (current market cap: $26.5m), assuming that the Initial Tranches and the Subscriber Option tranches are fully subscribed.