5 Sep 2013 07:01
NOT FOR DISTRIBUTION IN OR TO THE UNITED STATES (OR TO OR FOR THE ACCOUNT OF U.S. PERSONS), CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
5 September 2013
Enterprise Inns plc Convertible Bond Offering
Enterprise Inns plc ("ETI") today announces an offering (the "Offering") of approximately £100 million of senior, unsecured Guaranteed Convertible Bonds due 2020 (the "Bonds").
The Offering will provide ETI with low cost, unsecured long-term funding which will reduce ETI's overall cost of borrowing, provide ETI with increased flexibility and enhance prospects for growth.
The Offering will allow ETI to reduce the current level of pub disposals, focusing on the disposal of under-performing assets and maximising returns for shareholders by the reinvestment of disposal proceeds into trade generating capital expenditure schemes designed to drive like-for-like growth across the business.
As a result of the Offering, ETI will not need to draw down the £70 million Tranche A of the Forward Start Facility commencing December 2013, which carries an interest cost of 5.0% - 6.5% over LIBOR, thereby reducing the overall bank facility to £150 million, amortising to £75 million on its maturity in June 2016.
ETI Chief Executive Ted Tuppen said: "During the past four years, we have reduced the overall level of debt by over £1 billion, partly funded by cash generated from operations and the balance through disposals. As the quality of our pubs has improved, we have also moved towards delivering like-for-like income growth across the whole estate. The Offering will bring to an end the use of disposal proceeds for debt reduction and allow us to drive real growth in the business."
Further Information
The Bonds will be issued by Enterprise Funding Limited, a wholly-owned subsidiary of ETI incorporated in Jersey (the "Issuer"), and will be guaranteed by ETI, as is customary for transactions of this nature.
The Bonds will have a maturity of seven years, will be issued and redeemed at par and are expected to carry a coupon of between 3.50% and 4.00% per annum payable quarterly in arrear. The Bonds will be convertible into ordinary shares of ETI (the "Shares").
Concurrent with the issuance of the Bonds, a bookbuilding for an accelerated secondary equity placing of Shares (the "Concurrent Equity Placing") will be carried out by the Joint Bookrunners. The Concurrent Equity Placing is being undertaken in order to co-ordinate potential selling interest in the Shares resulting from the issuance of the Bonds. The final price for the bookbuilding of the Shares will be used as the reference share price for the Bonds (the "Reference Share Price"). The initial conversion price is expected to be set at a premium of between 30% and 35% above the Reference Share Price.
The final terms of the Bonds are expected to be announced today and settlement is expected to take place on or about 10 September 2013 (the "Closing Date").
It is intended that an application will be made for the Bonds to be listed on a recognised stock exchange after the Closing Date but prior to the first coupon payment of the Bonds (10 December 2013).
Barclays Bank PLC and Deutsche Bank AG, London Branch are acting as Joint Bookrunners (together, the "Joint Bookrunners") in respect of the Offering.
Enquiries
Tulchan Communications, Peter Hewer/Rebecca Scott 0207 353 4200
Ted Tuppen, Chief Executive 0121 733 7700
Neil Smith, Chief Financial Officer 0121 733 7700
Emma Greves, Investor Relations Manager 07990 550210
This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for otherwise buy any securities. The securities mentioned in this announcement have not been and will not be registered in the United States under the US Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the United States or to or for the account of U.S. persons, absent registration or exemption from registration under the US Securities Act. Stabilising action may take place with respect to the Bonds.
This communication is directed only at persons (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and qualified investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
The Joint Bookrunners are acting on behalf of the Issuer and ETI and no one else in connection with the Bonds and will not be responsible to any other person for providing the protections afforded to clients of the Joint Bookrunners or for providing advice in relation to the Bonds.
Each of ETI the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
Stabilisation/FCA.