Outcome of Board Meeting - Allotment of Foreign Currency Convertible Bonds (FCCBs)
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NHC Foods Ltd's board has approved the allotment of 270 Foreign Currency Convertible Bonds (FCCBs) with an aggregate value of USD 27 million. Each bond has a face value of USD 100,000, carries a coupon rate of 1.5% per annum, and has a 5-year tenure maturing on May 28, 2031. The bonds are unsecured and were issued at a 10% discount to face value. The bonds are issued under an ISIN: MU0000000370. This is a significant capital raise for the company in foreign currency.
The FCCB issuance brings in foreign capital but carries conversion risk for existing shareholders as the bonds can convert to equity, potentially diluting shareholding. The 1.5% coupon is low cost for the company.