Monbat

Leading lead-acid car batteries producer Monbat placed EUR 28m convertible bond, the Company announced in a regulatory statement. The bond ‘s term is 84 months and will pay out a semi-annual 6M Euribor + 3% interest, but min. 3% annually. The bonds will amortize in three installments at the end of the 5th, the 6th, and the 7th year of the life of the bond at 20%, 30% and 50% respectively. ELANA Trading is the bond issue manager.

Convertible bond with three options

The bond holders will have an option to convert their bonds to Monbat’s ordinary shares on the 48th, 66th and 78th month after issuance at a price equal to 90% of the weighted average price of a Monbat’s share on the Bulgarian Stock Exchange (BSO BU) for the six months preceding the respective conversion date. A minimum conversion threshold of 5% of the outstanding nominal value is required for the conversion option to take place.

Additionally, Monbat has the option to call the bond at the end of the 5th year, at 101% of the nominal value taking into the account any conversion and principal amortization.

The proceeds will finance expansion plans

Monbat’s initial plans were for a bond in the range of EUR 15m to EUR 30m, entailing a placement at 93% of the maximum threshold. The Company will use the proceeds to finance its expansion plans over the next 5 years. The latter include:

• Scaling up its organic batteries operation via an intended acquisition of a lead acid batteries producer in Tunisia – ASSAD (ASSAD TU) to tap on the North African market,
• Diversifying its recycling capacity via an acquisition in Italy and the investment in tin and antimony extraction facilities,
• and expanding its operations in the Li-Ion field with a high-power Lithium Iron Phosphate based facilities in Germany.

The latter expansion strategy is expected to triple Monbat Group’s EBITDA by 2021.

Check the latest equity research reports by ELANA Trading