At the end of yesterday’s market trade, New Hope shares were swapping hands for $1.84.
What did New Hope announce?
It could be an active day for the New Hope share price as investors weigh up the company’s latest release.
According to a statement to the ASX, the energy company has priced its senior unsecured convertible notes at $200 million.
The company said the notes will have a fixed coupon rate of 2.75%, paid twice a year for a 5-year period. Settlement of the bonds is expected on or around July 2021, with a maturity date of 2 July 2026.
This is unless the notes are redeemed, repurchased or converted beforehand.
The notes can be transferred into fully paid ordinary shares, with an initial conversion price of $2.10 apiece. This reflects a 25% premium over the reference price of $1.68 per share.
The net proceeds from the offer are expected to generate $196 million in cash for the company. The funds will be used for general corporate purposes, and may include growth opportunities plus mergers and acquisition activity.
New Hope CEO Reinhold Schmidt said:
We are very pleased with the demand experienced for the convertible notes offering. This transaction has enabled a new group of global institutional investors to invest in New Hope and provides diversified capital for us to expand as we continue to deliver on our core business of providing low cost, reliable and efficient energy to growing nations.
The convertible notes offering enhances New Hope’s ability to pursue growth and acquisition opportunities that may be available in the market, providing value to our investors.
About the New Hope share price
Over the last 12 months, New Hope shares moved in circles until the start of May this year. The company’s share price accelerated last month from a low of $1.13 to a 52-week high of $1.96 on 16 July.
New Hope has a market capitalisation of roughly $1.53 billion, with approximately 832 million shares on its registry.