Rapala VMC refinances business through €30 million hybrid bond
Rapala VMC Corporation has followed up on last week’s announcement that it was considering a plan to refinance its business by confirming that it has issued hybrid capital securities in the amount of €30 million.
And the company’s largest shareholder, Viellard Migeon Et Compagnie Sa, has already committed to the issue by subscribing to the value of €7.2 million.
The proceeds from the issue will be used for general purposes, including supporting Rapala VMC’s balance sheet, cash balance and improving its financial flexibility, while the company implements a savings programme in operating costs and optimises its inventories.
The issue will also diversify the company’s sources of finance to capital markets. Issue date for the capital securities is November 29th, 2023.
“We are highly grateful for the broad interest from capital markets towards our hybrid bond,” said Lars Ollberg, President and Chief Executive Officer of Rapala VMC.
“The oversubscribed transaction evidences the strong support from the investors and from the largest VMC shareholder. This transaction strengthens our financial position and maintains our excellent customer service in the challenging market environment. I also want to thank our staff for their dedication, great team spirit and unity.”
The capital securities bear a fixed coupon interest of 12.5% per annum until November 29th, 2026, which is known as the reset date. And from the reset date, a floating interest rate as defined in the terms and conditions of the capital securities.
The capital securities do not have a specified maturity date, but Rapala VMC is entitled to redeem them at their nominal amount on the reset date, and subsequently, on each interest payment date after that.
• Hybrid securities combine both debt and equity characteristics and allow companies to borrow money from investors.