Monbat AD, pursuant to Art. 92a, para. 1 of the Public Offering of Securities Act (POSA), informs the investors about the beginning of a public offering of up to 30 000 (thirty thousand) dematerialized, interest-bearing, convertible, freely transferable and unsecured bonds with an issue and nominal value of one bond in the amount of EUR 1 000 (one thousand) and a total issue and nominal value in the amount of EUR 30 000 000 (thirty million). The minimum number of subscribed convertible bonds, under which the offer shall be deemed successful, is 15 000 (fifteen thousand) convertible bonds.
ELANA Trading is the broker selected for the bond issue.
Purpose of the bond loan
Acquisition of non-current financial assets related to the main activity of MONBAT AD representing stakes or shares in companies with the same or similar scope of activity.
Accordingly, the purpose of the current bond issue is to finance:
- The acquisition of control over a lead-acid batteries scrap recycling factory in Italy – Piombifera Italiana thus providing the synergetic growth of the Group’s margins. Piombifera Italiana is one of the three largest recycling companies in Italy. Its recycling facility is situated in a lead-acid-batteries-scrap rich region which provides for a strong market position. The company is licensed to process a significant volume of scrap batteries and it is part of the international association of recycling companies – COBAT. COBAT’s membership allows the company to a sufficient annual scrap batteries allowance. This acquisition will benefit to a large extend MONBAT Group’s recycling operations in Bulgaria, Romania and Serbia.
- The acquisition of control (pending on positive due diligence outcome) in L’Accumulateur Tunisien Assad” (ASSAD). ASSAD is a vertically integrated group producing lead-acid batteries operating in North Africa with high profitability margins. The company’s 2017 financial results forecasts are as follows: EUR 7.4m in EBITDA, EUR 39.8m in revenues and 19% EBITDA margin. ASSAD’s production facilities are located in Tunisia and Algeria with 1.5 million batteries per annum capacity. The company has a major market share with its own brand on the Tunisian market – 41% and a considerable potential in penetrating the markets in Algeria and Libya with 12 commercial affiliates in the region.
- The acquisition of a company with the purpose of a focused product diversification and production of Li-Ion batteries. This will be executed via control over GAIA Akkumulatorenwerke (GAIA) and EAS Germany (EAS) entities. GAIA was established in 1996 and is one of the leading German companies in Li-Ion technologies. EAS was established in 2011 as a joint venture between GAIA and Enersys/Hawker GmbH. The company is specialized in cell production and the development of high quality technologies; heavy-duty, high power cylindrical cells for hybrid electric trains as well as heavy and defence industries applications.
Floating rate of 6-month EURIBOR plus mark-up of 300 basis points, but not less than 3.0 per cent per annum; Interest payments – semi-annually.
Method of interest payment
For each separate 6-month period, the interest (coupon) payments are calculated on the nominal value of each bond on the basis of the simple interest rate based on the day-count convention “actual/actual”.
Principal will be paid in three installments in the end of the 5th, the 6th, and the 7th year of the life of the bond; the respective installments will amount to 20%, 30% and 50% of the nominal value. In the event of conversion the principal payments will be made on the basis of the outstanding nominal value of the issue at the date of the respective payment. In this event the last installment at the end of the 7th year will be pay the whole outstanding nominal value of the bonds (if any).
The Issuer has the option to call 80% of the nominal value of the bond together with the corresponding interest payment at the end of the 5th year at a price of 101%. In the event of a prior conversion, the call option shall be for the current outstanding remaining part of the bond after the corresponding principal payment.
Each bondholder will have the right to replace (convert) the bonds into such number of shares that corresponds to the current conversion ratio at the time of the replacement (conversion). This right will be available to bondholders:
- on the 48th month for 100% of the outstanding nominal value of the bonds;
- on the 66th month for 80% of the outstanding nominal value of the bonds;
- on the 78th month for 50% of the outstanding nominal value of the bonds.
Minimum conversion threshold
The total amount of the bonds submitted for conversion may not be less than 10% of the outstanding nominal value of the bond loan, if the latter is less than EUR 20 million. If the outstanding nominal value of the bond loan is above EUR 20 million, the minimum amount for conversion shall be 5% of the outstanding nominal value. These minimum amount applies to all conversion dates.
By means of filing a request under the procedure described below, each bondholder may request the conversion of the bonds he/she holds according to their outstanding nominal amount. This amount will be converted against shares issued by the Issuer at a price equal to 90% of the weighted average price per one share of MONBAT AD during the last six months of trading preceding the conversion date. The conversion coefficient is equal to the nominal value of each bond divided by 90% of the weighted average price per share of MONBAT AD during the last six months of trading preceding the conversion date).
Rights attached to the bond
- Right to receive payment of principal which represents the nominal value of the owned bonds;
- Right to receive interest;
- Right to participate and to vote in the General Meeting of Bondholders of this issue; each bond shall entitle the holder to one vote in the general meeting;
- Right to elect and to be elected as representatives at the General Meeting of Bondholders pursuant to art. 209 of CA;
- If elected as bondholders’ representative, the right to participate with advisory capacity in the general meeting of shareholders of the Issuer;
- Pre-emptive rights to have their claims settled before those of the shareholders in the event of winding up and insolvency;
- The right to request the issuing of an enforcement order pursuant to art. 417, item 9 of the Code of Civil Procedure, i.e. without having to bring an action against the Issuer.
- Bondholders may request the court to decree an immediate enforcement and to issue a writ of execution if the Issuers is in default on principal or interest payments.
- The right to convert the bonds in ordinary shares of MONBAT AD.
The existing shareholders of the Issuer have the right to subscribe for bonds in proportion to their stake in the capital of the Issuer. Subscription will be guaranteed by the issue of pre-emptive rights.
The shareholders wishing to exercise their pre-emptive rights may file a bond subscription until the latest date for transfer of the pre-emptive rights.
The shareholders not wishing to exercise their pre-emptive rights may sell them until the latest date for transfer of the pre-emptive rights.
The pre-emptive rights will be traded on the BSE Main Market, Subscription Rights Segment. Shareholders may dispose of the rights by filing a sell order to the investment intermediary on whose account with the Central Depository the rights have been registered.
Any person who has acquired pre-emptive rights within the period for transfer of rights, may exercise them by filing a bond subscription application until the latest date for transfer of the pre-emptive rights.
The rights not exercised until the latest date for transfer of the pre-emptive rights will be offered for sale at an open-bidding auction organized by the BSE Sofia.
Any person holding rights, acquired during the open-bidding auction, may exercise them by placing an application for subscription for bonds until the latest date for subscription.
In this offering one bond may be subscribed in exchange for 1 300 rights.
The bond subscription application shall be filed to Elana Trading directly or through the investment intermediary on whose account with the Central Depository the applicants’ rights have been registered.
The first date for bond subscription shall be the first working day after the expiration of 7 calendar days from the first date of the public offering. This date is also the first date for transfer of rights. The latest date for transfer of rights is 14 days after the first date. The latest date for subscription of bonds shall be 15 working days later after the latest date for transfer of rights.
Deadline for bond payment
The issue price for the bonds subscribed shall be paid in to a special escrow account to be stated in the announcement for public offering under Art. 92a, para. 1 of POSA.
Admission for trading
In the event that the offering has been successfully completed and the new bond issue has been registered with the Central Depository and the FSC, the Issuer will request the admission of the issue to trading on the BSE regulated market.
Prospectus of Monbat bond issue
- Prospectus Part 1: Registration document
- Prospectus Part 2: Securities note
- Prospectus Part 3: Summary
Public offering schedule
- Start of rights trading on the Bulgarian Stock Exchange: 13.12.2017
- Start of bonds’ subscription: 13.12.20117
- End of rights trading on the Bulgarian Stock Exchange: 21.12.2017
- End date of rights’ transfer: 28.12.2017
- Auction date for non-exercised rights: 05.01.2018
- Deadline for bond subscription: 19.01.2018
- Deadline for payment of bonds: 19.01.2018