OAO Acron, a Russian fertilizer maker, plans to sell 15 billion rubles ($515 million) of 10-year bonds to replace debt it’s buying back as part of a reorganization.
Acron shareholders last month approved a takeover of its Granit unit, which led to the cancelation of about 15 percent of Acron’s treasury shares. That triggered a put option, giving holders of about 10 billion rubles of Acron’s bonds the right to sell them back to the company.
The board of directors approved the sale of three, 5 billion-ruble tranches of bonds as a “substitute,” Ilya Popov, head of investor relations, said by e-mail today. He declined to comment on the volume of bonds tendered so far.
Acron will use cash and “committed credit facilities, mainly in U.S. dollars” to buy out bondholders and the new ruble debt will serve as a “natural hedge corresponding to Acron’s revenue structure” which is mostly dollars, rubles and yuan, Popov said.
The bonds may be sold as soon as next quarter, while the exact timing will depend on market conditions, he said. “We do not expect material changes in interest rates” on the new bonds, Popov said.
The yield on Acron’s 10-year bonds putable in 2014 was unchanged at 8.19 percent as of 6 p.m. in Moscow today, data compiled by Bloomberg show.