Genting Singapore: Bond Conversion Directive

So, it has now become mandatory. No more waiting for another two years.

Genting Singapore has issued a notice to the holders of its S$450m convertible bonds due 2012 for the mandatory conversion of the outstanding bonds into fully paid-up shares at the conversion price of S$0.95.

As at 25 Jan, the outstanding Bonds amounted to S$321.1m.

This mandatory conversion is not entirely surprising given that

i) it satisfies the conditions of the conversion as stipulated in the terms of the bonds and

ii) 40% of Genting Singapore’s proceeds from its S$1.5bn rights issue has been earmarked to repay borrowings.

It is estimated that this mandatory conversion will require about 9% of Genting Singapore’s estimated S$3.5bn post-rights cash balance.

The impact to net gearing is minimal,though.