Hudson operates 989 stores in 88
different airports and other transport
terminals, including 24 of the 25 largest
airports in the US and Canada. These
include travel essentials and convenience
stores, bookstores, duty-free stores,
electronics stores and food and beverage
outlets.
At top-end pricing, the terms would give
Hudson a market capitalisation of
US$1.94bn. Hudson will emerge from the
IPO with net debt of about US$380m based
on pro forma numbers.
Hudson expects to report net sales growth
of 6%-7% to US$1.755bn-$1.765bn for 2017,
and like-for-like sales growth of 4%-5% (the
NUMBERSûAREûSTILLûBEINGûlNALISED û)TûALSOû
EXPECTSûTOûREPORTûOPERATINGûPROlTûOFû
US$57m-$61m for the same period, up 32%-
41% versus the prior year.
Dufry is selling a hefty 42% of Hudson’s
Class A and B shares outstanding, but will
retain 93.1% voting power post-IPO
through its sole ownership of 53.1m of the
Class B shares (each of which have 10 votes
per share).
The IPO has been in the works since
(UDSONûlLEDûCONlDENTIALLYûINû!UGUSTûLASTû
year.
Dufry’s own share price is up more than
50% since February 2016, but is down 14%
since May last year.
In October, Dufry management said the
IPO would take account of the different
characteristics of the US travel retail
market versus its other travel retail
operations worldwide. These included the
heavier reliance on food and beverage
sales, where growth could be accelerated
with new concepts and minority partners.
Dufry plans to maintain a majority
interest and will continue to consolidate the
business in its accounts.
The IPO will also give Dufry strategic
mEXIBILITYûTOûDELEVER ûFUNDû-! ûANDORû
return cash to shareholders.
STRUCTURED EQUITY
CHINA
KHAZANAH SELLS ISLAMIC EBSMalaysian sovereign wealth fund KHAZANAH
NASIONAL has raised US$320.8m from zero-
coupon Islamic exchangeable bonds,
according to a pricing term-sheet.
4HEûBONDS ûORûSUKUK ûWITHûAûTENORûOFûlVEû
years and an investor put after three years,
are exchangeable for the H-shares of CITIC
SECURITIES.
The sukuk were offered with a yield to
maturity of 0% and an exchange premium of
35%–40% over the reference price of
HK$18.9722. The premium was set at the
top of the range.
According to a statement from Khazanah,
the books were 5.5 times covered with 78
investors, comprising long-only funds,
hedge funds, arbitrage funds and asset
managers across Asia and Europe.
More than half of the demand came from
outright investors.
The recent strong run-ups in share prices
of Chinese brokerages have drawn investors’
attention to the issue. Investors are also
comfortable with Khazanah’s name and
credit, given that it is a regular issuer.
CIMB and JP Morgan were joint
bookrunners.
The credit spread was assumed at 85bp,
THEûBONDûmOORûATû ûANDûIMPLIEDûVOLATILITYûATû
29 versus historical volatility of mid-20s.CHANGSHU BANK SELLS Rmb3bn OF CBSJIANGSU CHANGSHU RURAL COMMERCIAL BANK has
launched a Rmb3bn (US$466m) offering of
six-year convertible bonds. Books closed on
January 19 and subscription results will be
announced on Monday.
The coupon on the CB issue is 0.30% in
year one, stepping up to 1.80% in year six.
The initial conversion price has been set at
Rmb7.61, a discount of 0.7% to the January
16 close of Rmb7.66. The unsecured CBs
received an AA+ rating from China
Chengxin Securities.
China Securities is the sponsor.
SHANGHAI ELECTRIC GROUP has applied for
Shanghai Stock Exchange approval for a
public offering of six-year exchangeable
bonds of up to Rmb3bn in A-shares of
SHANGHAI MECHANICAL AND ELECTRICAL INDUSTRY.
Shanghai Electric holds 484m Shanghai
Mechanical A-shares, representing about
47.35% of the total issued capital.
Credit Suisse Founder Securities is the sole
bookrunner.
The China Securities Regulatory
Commission has agreed to suspend the
review of CENTRAL CHINA SECURITIES’ application
for a proposed issuance of six-year CBs of up
to Rmb2.55bn.
Last month, CCS applied to the CSRC for a
suspension of its CB application after the
regulator carried out an investigation into
the company for alleged inadequate due
DILIGENCEûASûTHEûlNANCIALûADVISERûONû4IANJINû
Fengli Innovation Investment’s acquisition
of Xuzhou Jieneng Technology
Development.
Changjiang Financing Services was sponsor
on the CB issue.
WUHU SHUNRONG SANQI INTERACTIVE
ENTERTAINMENT NETWORK TECHNOLOGY failed toget approval from the CSRC for a proposed
issuance of six-year CBs of up to Rmb2.1bn.
During the hearing, the CSRC questioned
the company about the rationality and
necessity of its plans to use the proceeds.
The games developer had planned to use
the proceeds for the distribution and
operation of network games, as well as for
acquisitions. GF Securities was the sole
bookrunner.RUSSIA
POLYUS BRINGS FIRST
CONVERTIBLE BONDFriday continues to be an active day for
European ECM in 2018, with Russian gold
miner POLYUS issuing its debut convertible
bond and an aggressively structured one at
that.
Polyus completed a US$858m Moscow re-
IPO and GDR placing last August, having
been de-listed in 2015 over fears of Western
sanctions following Russia’s annexation of
#RIMEAû!SûAûRESULT ûTHEûFREE
mOATûROSEûTOû
16.34% from 6.76% previously.
After initially struggling, the stock rose
above the US$33.25 re-IPO price after a
month and was pushing above US$43 by late
November, but fell sharply in early
December to just above US$36 and has risen
with regular drops since to US$39.10 by
Friday morning’s open.
The new paper totals US$250m and has a
considerably shorter tenor than much
recent issuance, maturing in 2021. Issued at
par, there is a call after two years and 21
days subject to a 130% hurdle.
Proceeds from the convertible bond will
BEûUSEDûTOûRElNANCEûEXISTINGûDEBTûANDûFORû
general corporate purposes. Earlier in the
week, Polyus had abandoned a deal to sell a
10% stake to China’s Fosun that was
expected to fetch around US$900m.
Some of that cash was expected to be used
by Polyus owner Suleiman Kerimov for a
POTENTIALûlNEûRELATINGûTOûALLEGEDûTAXûEVASIONû
while some analysts suggested Kerimov had
ENOUGHûCASHûINûRESERVEûFORûANYûlNE ûTHEREû
was speculation that the cancelled sale
could trigger an equity fundraising.
Despite the short tenor, terms were
aggressive at 0.5%-1.0% for the coupon, with
a premium range of 30%-35%. There is a
conversion price adjustment for dividends
paid.
Existing straight bonds maturing in 2020
and 2022 provided inputs for a credit spread
of 160bp. Implied vol was 26%-31% on
guidance, and while historic vol is limited,
DAYûVOLûWASûû4HEûBONDûmOORûONû
guidance was 90%-91.5%. Stock borrow was
provided by joint bookrunners Deutsche Bank