Shares tumble 9% on bond plan

PRIVATE equity company Brait tumbled the most since November 2014 after it announced plans to sell £350 million (R7.3 billion) of five-year convertible bonds to fund acquisitions. The shares led declines in the all share index on Friday, dropping as much as 8.9 percent to R128.85, before paring losses to trade at R130 at the close on the JSE. More than 3 million securities changed hands, 2.5 times the three-month daily average. The debt would pay a coupon of between 2.5 percent and 2.75 percent and mature on September 18, 2020, the company said. The initial conversion price would be set at a premium of 30 percent to 35 percent above the volume-weighted average value of the shares between the start of the offering and its pricing, Brait said. Brait planned to use the debt proceeds “for general corporate purposes with a primary focus on funding strategic acquisitions”, it said. Brait’s equities have rallied 67 percent this year. The company ditched the private equity business model four years ago by issuing more publicly owned shares. But it has stuck with its strategy of investing in private companies, including British supermarket chain Iceland Foods and South Africa’s Premier Foods, the biggest maker of local staples such as maize meal and bread. – Reuters and Bloomberg