Debenture issue from Bogawantalawa Tea Estates
View(s):Bogawantalawa Tea Estates PLC (BTE) this week announced the issue of 5 to 7 year, senior, listed, BBB+ rated, unsecured, redeemable, Rs.100 Debentures, issued at Rs.85 each, totalling Rs.850 million. The issue opening is scheduled for July 18.
The debenture listing, through Managers to the Issue – Areva Investments (Pvt) Ltd, would assist the company to broaden its funding mix and to explore funding from diverse sources. The features of the debt includes call options on investors for a specific number of shares based on the number of debentures held, giving them the opportunity to be a part of the shareholding of the company, if the future profitability of the company improves. If these call options, which have cash considerations attached are exercised by the investor, the Issuer would benefit from the interim cash flows received by the company, the managers to the issue said in a media release.
BTE’s maiden listed debenture issue also marks the first non-finance sector debt listing, so far to grace the markets this year. The proceeds of debentures would be utilised for the commencement of the Sinking Fund, settlement of high-cost debt, on-going field development and factory development activities.
Bogawantalawa Tea Estates, also known as the Golden Valley of Ceylon Tea, has been producing the finest teas since 1869. The company manages over 6,000 hectares of land and tucked away, in the central hills of Sri Lanka. The high grown tea estates of BTE are blessed with perfect micro-climatic conditions to produce some of the finest all-rounded teas in the world.