Vodafone announced plans to raise EUR 4 billion with the issue of mandatory convertible bonds. The proceeds will be used to finance its planned takeover of Liberty Global's cable activities in Germany and eastern Europe.
The sterling-denominated bonds will be issued in two tranches, maturing no later than March 2021 and March 2022 and with coupons of respectively 1.4-1.7 percent and 1.7-2.0 percent.
When converted they would represent up to 9.8 percent of Vodafone's current total outstanding shares. Such an issue was already approved by shareholders last year under a general authorisation.
Vodafone said it will look at the potential to buy back shares in order to offset the increased number outstanding. This will depend on market conditions and the company's financial position. Its current share repurchase programme also will continue, and the company announced separately that it's bought over 30 million shares from JP Morgan since the start of this month, to help offset a convertible bond issued in 2016. This brings its treasury share holdings to 1.34 billion shares, out of a total 27.48 billion outstanding.
The initial conversion price will be based on Vodafone's closing share price the day before the issue was announced (GBP 1.3136) or the average of the daily volume-weighted average prices for the three days starting 6 March. Pricing is expected after the close of the market on 08 March.
