Holders of Fraser & Neave Ltd.’s 5.5 percent 2016 and 6.0 percent 2019 notes voted against allowing the company to amend the terms of the debt, hindering plans to spin off a property unit without causing a default.
Investors in three other series of the beverage and property conglomerate’s debt supported the amendment plan, the company said in a statement late yesterday.
The company, controlled by Thai billionaire Charoen Sirivadhanabhakdi, had asked holders of S$808.25 million ($648 million) of debentures to waive certain default clauses and allow the company to buy back the securities on or before June 30, 2014 for a fee, according to Oct. 28 announcements.
F&N and its treasury “will consider their options in light of this result and will make an announcement at the appropriate time,” F&N said yesterday.
F&N plans to carve off its real estate division via a Singapore listing later this year. The 130 year-old group is seeking to separate that division from its other operations including its beverages and publishing units to focus on each units’ individual expansion strategies after the S$13.8 billion takeover by Thailand’s richest man.
Jennifer Yu, a Singapore-based investor relations manager at F&N, said last week when asked about the proposed bond deal that the company had “considered all options” and decided the buy back offer would “be the most consistent and fair approach for us to adopt.”
Singapore-based F&N offered to pay S100 cents on the dollar and a fee worth half of the note’s coupon and the accrued interest on the date that it can call the securities, the documents last month show.
The terms offered were below market levels for F&N’s higher coupon bonds, three investors in the S$108.25 million 5.5 percent notes due 2016 said last week, all of whom intended to vote against the proposal.
F&N shareholders voted in favor of the spin off of Frasers Centrepoint Ltd. at an extraordinary general meeting on Nov. 13, according to a company release.
Shares in F&N closed down 0.2 percent at S$5.79 in Singapore. Its S$108.25 million 5.5 percent 2016 debentures were yielding 2.689 percent on Nov. 13 compared with 2.430 percent at the start of the quarter, Bloomberg-compiled prices show.
Bonds subject to the vote yesterday also included S$150 million of 3.62 percent debt, S$50 million of 2.45 percent securities due 2015, S$220 million of 2.48 percent notes due 2016 and S$80 million of 3.15 percent debentures due 2018, according to F&N’s Oct. 28 announcement.
Holders of the first three of those series approved the company’s plan. A quorum of holders to the 2018 bonds, which the F&N refers to as seven-year bonds, wasn’t achieved and the vote on amending that debt will be held again on Nov. 29, the company said.
Charoen, who acquired F&N via his companies including Thai Beverage Pcl earlier this year, has a net worth of $8.9 billion, according to the Bloomberg Billionaires Index.