OHL Mexico Plunges on Convertible Debt Plan: Mexico City Mover
Shares fell 9.2 percent to 34.86 pesos at the close of trading in Mexico City, the steepest drop since they started trading in November 2010. Volume was more than 24 times the three-month daily average, according to data compiled by Bloomberg.
OHL plans to sell at least 250 million euros ($321 million) of five-year debt convertible to OHL Mexico stock, according to a regulatory filing. The offering may be increased to as much as 300 million euros if an overallotment option is exercised. The bonds may be exchanged for ordinary shares equivalent to about 7.5 percent of capital, according to the filing.
The proceeds may be used to prepay existing debt of a different OHL unit, Credit Suisse Group AG analysts Eugenio Amador and Julian Bravo wrote in an e-mailed not to clients today. OHL Mexico will still need to refinance its current obligations and access new financing in the next three years, the analysts wrote.
“This convertible bond issuance will not provide OHL Mexico with cash proceeds to face these obligations generating the possibility of an equity dilution and complicating their possibility of accessing new financing,” Amador and Bravo wrote.
OHL Mexico has gained 23 percent in 2013 as Mexico’s benchmark IPC index slipped 0.1 percent.
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