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Sunday, 2 October 2022

In a market first, TCI Sanmar issues bonds to restructure 15% of its debt

TCI Sanmar issued bonds worth USD 117.7 mn in a private placement with nine foreign banks, according to a statement (pdf) from its legal counsel on the transaction, Matouk Bassiouny & Hennawy. The industrial chemicals maker issued the bonds by converting 15% of its debt into non-convertible debentures (NCDs), marking the first time debt has been converted to bonds and issued on the local market, the law firm said in its press release. Matouk Bassiouny Associate Lawyer Shery Soliman declined to name the banks involved when we asked yesterday.

Non-convertible debentures? Debentures are long-term debt instruments that aren’t backed by any form of collateral. The “non-convertible” part means that TCI Sanmar’s bonds can’t be converted into equity shares. “Issuing non-convertible bonds will allow the company a period of time with low interest to repay its debt.”

Advisors: Arab African International Bank (AAIB) acted as the onshore security agent and subscription receiving bank on the transaction, while White & Case was the legal counsel to the banks.

About TCI Sanmar: The Indian industrial chemicals manufacturer has invested some USD 1.5 bn into local factories for polyvinyl chloride (PVC), caustic soda, calcium chloride and green ethylene, making it India’s largest investor in the country, according to its website.

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