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FPT to issue $101m in convertible bonds
Software giant FPT will issue convertible bonds with a combined par value of up to VND1.8 trillion (US$101.1 million) to raise cash, said company chairman Truong Gia Binh at the firm’s irregular shareholder meeting on Thursday.
The bonds will be issued in the third quarter with a face value of VND100,000, or a multiple of VND100,000 per bond. They are expected to have a maturity term of three years, with a coupon of 5-7 per cent per year.
The issuance was to be implemented "in consideration of current market conditions and funding needs of FPT Corp", Binh said.
The management board said the money mobilised would finance the company’s key businesses, such as information technology, informatics services and telecommunications, which showed "attractive profitability".
Warrants
The bonds will be accompanied by warrants: Every VND1 billion ($56,180) in par value of bonds is attached with no more than 1,500 warrants, with each warrant holding the right to buy 10 FPT shares.
ANZ Bank is the consultant and manager for the issuance.
In response to a Dragon Capital representative’s question about why FPT did not give priority to its existing shareholders, Binh said private placement would assure a high possibility of success with lowest costs for the issuance, which was "important for an enterprise at this time."
The shareholder meeting also approved such subsidiaries as FPT Information Systems Co Ltd and FPT Trading Co Ltd to be equitised in the next two weeks. Each affiliate would sell 5 per cent of its equity (VND350 billion for the first and VND300 billion for the latter) to its staffs in the form of preferential shares at VND10,000 per unit.
Based on an earnings per share rate projected for this year at VND6,000, FPT projected dividend rates of no lower than VND2,500 per share.
The FPT now has a market capitalisation value of about VND10 trillion ($561.8 million), the eleventh-largest on the domestic bourse. Foreign investors hold around 34 per cent of its equity.
In the first half of the year, the company reached VND8.2 trillion ($460.7 million) in turnover, representing 114 per cent of the target set for the period. After-tax profits reached about VND451 billion ($25.3 million), up 16 per cent year-on-year.
The company targeted revenues of VND17.1 trillion ($961 million) this year, just 1.62 per cent higher than last year, but expected profits to climb by 17 per cent to VND1.5 trillion ($84.3 million).
FPT shares rose 4.79 per cent yesterday on the HCM City Stock Exchange to close at VND76,500 ($4.3) per share.
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