Naspers Said to Seek 7-Year Dollar Bond to Finance ExpansionLyubov Pronina and Chris Spillane
Naspers Ltd., which has stakes in China’s Tencent Holdings Ltd. and Russia’s Mail.ru Group Ltd., is considering the sale of a 7-year dollar bond to fund acquisitions, according to a person familiar with the talks.
Africa’s largest media company has discussed its first bond sale in three years with an initial yield guidance of at least 6 percent, according to the person, who asked not to be identified because the information isn’t public. Three people who attended investor meetings and asked not to be identified said yesterday that the company was looking to raise between $500 million and $1 billion.
Naspers began a bond road show on July 8 to gauge investor appetite for debt sold by its unit Myriad International Holdings. The company, based in Cape Town, is expanding its Internet business through acquisitions to take advantage of fast-growing emerging markets.
Naspers will use the proceeds for “future acquisitions and the repayment of existing credit facilities,” the company said in a July 2 filing. Meloy Horn, the head of investor relations for Naspers, declined to comment.
Naspers plans to add to a portfolio of overseas assets that includes a 34 percent stake in Tencent, China’s biggest Internet company, and 29 percent of Russian social-media and gaming provider Mail.ru. The company already has enough debt capacity for $500 million of acquisitions, Chief Financial Officer Steve Pacak said in a June 25 telephone interview.
Naspers was one of three investors in a $200 million funding round for Flipkart Online Services Ltd., the Indian online retailer said yesterday.
The stock gained as much as 3.5 percent to 784.25 rand, the highest since September 1994, and rose 1.6 percent to 770 rand at the market close in Johannesburg. Naspers has advanced 42 percent this year, the second-best performer after Mondi Group in the FTSE/JSE Africa Top40 index of South Africa’s largest companies, which has increased 3.7 percent.
Naspers is the latest South African company to consider raising debt this year. Eskom Holdings SOC Ltd., the country’s state-owned electricity provider, needs to plug a 191 billion-rand ($19 billion) funding gap to avert a repeat of blackouts that closed mines and factories in 2008. Transet SOC Ltd. plans to sell as much as $1 billion by the year-end in the country’s first rand bond to foreign investors, the state-owned ports and rail operator’s CFO said this month.
Naspers has a long-term debt rating of Baa3 with a stable outlook, according to Moody’s Investors Service. That’s the lowest investment grade as defined by the New York-based ratings firm. It had cash and cash equivalents of 15.8 billion rand for the year ending March compared with 9.8 billion rand a year earlier.