Immofinanz Chief Plans to Refinance Convertible Bonds by April

Sept. 8 (Bloomberg) -- Immofinanz AG, Austria’s biggest
property developer, plans to refinance 926 million euros ($1.18
billion of convertible bonds by April 30, Chief Executive
Officer Eduard Zehetner said.
For the sale to take place, the company’s share price would
need to rise above 3 euros, the CEO told journalists in Vienna
yesterday. That would mean a conversion price of 4.20 euros to
4.30 euros for a redemption premium of a 35 percent to 40
percent, he said.
That price range would be high enough to attract investors
without significantly diluting the value of existing shares, he
said.
The Vienna-based company sold 926 million euros of 2014 and
2017 convertible bonds, according to data compiled by Bloomberg.
Investors can force the company to redeem the 2014 notes in
January 2012 and have a so-called put option on the 2017
securities in November 2012. Buyers of the 2014 bonds can redeem
them for shares when the price reaches 14.68 euros.
Immofinanz closed at 2.75 euros in Vienna trading yesterday
and was last priced above 3 euros on May 3. The stock has
increased 10 percent this year, through yesterday, giving the
company a market value of about 2.9 billion euros.
Zehetner said issuing a new convertible bond is an
“optimistic” scenario.
“If you are less optimistic, it could be that we sell a
few properties,” he said. “This -- together with the 500
million euros we can easily access -- would provide enough cash
to pay the puts for the two convertibles due in 2012.”
At its annual shareholder meeting on Sept. 28, Immofinanz
will ask investors for the right to sell bonds convertible into
as many as 310 million shares over the next five years. That’s
equal to 30 percent of the company’s outstanding shares. The
developer has yet to hire an investment bank to issue the bond,
the CEO said yesterday.
Zehetner, who joined the company in November 2008, also
said he bought 300,000 shares in Immofinanz, bringing his total
holding to about 1.2 million shares.