Ferrotec Corporation
Supplementary Explanation Materials Regarding the 2028 Maturity Euro Yen Convertible Bond with Warrants
FerroTec Corporation disclosed supplementary explanation materials concerning the 2028 maturity Euro Yen convertible bond with warrants issued on June 23, 2023 (issue amount: 25 billion yen), including details on the soft call clause and conversion price adjustment clause.
Key Figures
- Issue Amount: 25 billion yen
- Reference Stock Price / Initial Conversion Price: 3,165 yen (closing price on 2023/6/7) / 4,020 yen (Premium rate: 27.01%)
- Potential Dilution Rate: Maximum 13.8%
- Outstanding Shares: 47,117,949 shares (as of 25/11/14)
- Equity Ratio (Post-Conversion): 41.15% (+4.15pt)
AI要約
Issuance Overview of Convertible Bonds with Warrants (CB)
FerroTec Corporation issued Euro Yen convertible bonds with warrants maturing in 2028 on June 23, 2023 (issue amount: 25 billion yen). These CBs were issued as zero-coupon bonds with an issue price of 102.50 yen, issue value of 100.00 yen, a term of 5 years, and an interest rate of 0%. At issuance, the conversion price was set above market price to suppress short-term EPS dilution. Accompanying clauses include a 130% soft call option exercisable after 3 years and a put option exercisable after 3 years. The proceeds will be allocated to the construction of a factory at the Malaysian subsidiary, domestic and overseas capital expenditures, and repayment of bonds and long-term borrowings.
Conversion Price Adjustment Clause and Dilution Impact
This CB includes a conversion price adjustment clause (dividend protection) whereby the conversion price is adjusted upon dividend payments. A soft call option is set where the issuer may redeem early if the stock price exceeds 130% over a specified period. The potential dilution rate is a maximum of 13.8%. Upon conversion, equity capital is expected to increase by approximately 25 billion yen, raising the equity ratio from 37.0% to 41.15%, a 4.15-point increase. This is expected to strengthen equity capital in the future.
