Bain Capital’s Edcon Plans Euro, Dollar Notes to Pay 2014 Bonds
Edcon Holdings (Pty) Ltd., the South African clothing retailer controlled by private-equity firm Bain Capital LLC, will issue euro- and dollar-bonds and buy back existing notes to repay debt maturing next year.
South Africa’s largest fashion retailer will tender for 700 million euros ($946 million) of the outstanding 1.14 billion floating-rate bonds due in June 2014, the company said in a statement today. It offered a total 325 million euros of 9.5 percent notes denominated in euro and dollars maturing in 2018 to investors, it said.
Edcon will use part of the proceeds from selling its 8.8- billion rand ($992 million) debtors book to Barclays Plc’s Absa Group Ltd. (ASA) together with a 4.12-billion rand term loan facility it negotiated with local and international banks, to fund the buyback, the company said.
Bain, based in Boston, bought Edcon in May 2007 for 25 billion rand in an effort to tap rising consumer spending in Africa’s biggest economy. The retailer, which owns the Top Shop brand in South Africa and had 1,218 stores at the end of 2012, has 25.3 billion rand in debt of which 13.8 billion rand will mature next year, according to data compiled by Bloomberg.
Same-store sales probably declined by 3.4 percent to 3.5 percent in the 13 weeks through Dec. 29, Chief Executive Officer Jurgen Schreiber said yesterday. The decrease reflected lower sales at its discount division, store disruption during refurbishment of 72 stores and lower mobile phone sales, Mark Bower, chief financial officer, said.
The yield on the Edcon’s 9.5 percent 317-million euro bond due March 2018 rose 38 basis points, or 0.38 percentage point, to 9.96 percent, the highest since Jan. 7, by 4:40 p.m. in Johannesburg.
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