Sometimes investors really get burned when a company posts bullish news or headlines right in front of something or in connection with other details that may cause an opposite reaction. Today there was some potential for such as Componenta (OMXH: CTH1V) hiked full-year 2012 outlook slightly as a result of implemented price increases and improved cost structure.
This came together with the news that its current syndicated loan has been extended by one year and that the company is also conducting a rights issue of 10-20 million Euros and issuing a 20 million hybrid bond. Componenta is also selling its Manisa, Turkey passenger car aluminium wheel production unit. All these measures should reduce interest-bearing debt by a third.
The hybrid bond is offered to select investors in a private placement at fixed 12% per annum rate for four years. After this time the interest rate increases if the company does not redeem the bond. The bond is subordinate the other debt obligations and is classified as an equity instrument in IFRS accounts.
The share issue will be done without pre-emptive rights to existing shareholders. A maximum of six and a quarter million new shares will be issues at 3.20 Euros per share will be offered to the public at Alexander Corporate Finance Oy in Helsinki. The stock has gained just over 3% to trade at 3.32 Euros in the Afternoon session.
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