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FRASER and Neave (F&N) has sweetened its offer to unpersuaded bondholders by tacking an additional 375 to 600 basis points to its original proposal as the company seeks certain concessions ahead of a business restructuring.
In a notice published yesterday, F&N sought bondholders' approval to give it a call option to redeem its $108.25 million of 5.5 per cent notes due 2016 at par plus 6.5 per cent and accrued interest.
Its earlier offer for this series, which was rejected last month, was for par plus 2.75 per cent and accrued interest.
For the $200 million of 6 per cent notes due 2019, F&N raised its proposed early redemption offer to par plus 9 per cent and accrued interest.
The earlier proposal of par plus 3 per cent and accrued interest was also rejected.
Noteholders who accept the proposals before the business close of Dec 16 will also receive an additional early-bird fee of 50 basis points.
A bondholders' meeting will take place on Dec 23 to vote on the proposals.
F&N is hoping that the better terms will sway noteholders into granting the company waivers that will allow F&N to avert technical default as it splits off its Frasers Centrepoint Ltd (FCL) property business in a new listing.
The 6 per cent notes had been trading close to 109 over the counter before the new proposal was announced.
The new offer appeared to placate some bondholders.
"All-in price of 109.5 plus accrued for the 6 per cent and 107 plus accrued for the 5.5 per cent would seem reasonable," one bondholder told The Business Times.
Some bondholders had been unhappy with what they felt was an aggressive stance by F&N during early negotiations.
The company had raised the prospect of a strategic default, which would have allowed the company to pay the lower amount of par plus accrued interest to bondholders, although doing so could have exacted a potentially heavy price in future fundraising.
The two debt series targeted by Friday's notice are the only remaining tranches of publicly traded debt for which F&N has yet to secure the necessary waivers. Holders of F&N's other debt issues in November accepted the initial offer of par plus half the coupon and accrued interest.
Following the listing of FCL, F&N will be left with its food and beverage and its printing and publishing businesses.
The restructuring comes after Thai tycoon Charoen Sirivadhanabhakdi earlier this year won control of more than 90 per cent of F&N's shares.
Shares of F&N closed at $5.71 yesterday, up by 0.2 per cent or one cent.