Tulip to raise $125mn via FCCBs

Tulip IT Services today announced the launch of $125 million zero coupon, five-year convertible bonds.

According to a release issued by the company to the BSE today, the lead manager has an option to increase the issue size by an additional $25 million.

"Given a favourable credit and interest rate environment, the company has decided to issue the bonds to meet capital expenditure in connection with the strengthening and expansion of the telecommunications network, make overseas acquisitions and any other corporate use as may be permitted in accordance with applicable laws," the release added.

The bonds will have an yield-to-maturity of 7-7.75% per annum (calculated on a semi-annual basis), and the conversion price is expected to be set at a premium of between 30-35% to the average price of shares on the NSE between the opening of trade and pricing.

The bonds, if not converted, redeemed or purchased and cancelled, would redeemed at 141.871% to 147.185% of par on maturity.