African Minerals to offer up to $350 Mln of convertible bonds due 2017

African Minerals Ltd (AMI.L: News ) said Monday evening that it is launching a book-build offering of up to $350 million of convertible bonds due 2017.

The bonds will be issued at par and are expected to have a coupon of 8.50 percent payable semi-annually in arrears. They will be convertible into fully paid ordinary shares of the company at a conversion price set at $10.98. Settlement of the offering is expected to take place on or about February 10.

The company may increase the $300 million issue by up to $50 million. Based on an issue size of $300 million, the ordinary shares to be issued upon conversion of the bonds would represent 8.3 percent of the current issued and outstanding ordinary shares of the company.

The company intends to use the net proceeds from the offering primarily for the expansion of production at its Phase I Tonkolili iron ore operation to 20 Million tonnes per annum, or Mtpa. The Tonkolili Mine produced 1.3 Mt of saleable ore in 2011, exceeding its target of 1.2 Mt.

Standard Bank Limited, Deutsche Bank AG, London Branch, and Dundee Securities Ltd have been appointed joint global coordinators for the offering of convertible bonds. Deutsche Bank AG, London Branch, will be the bookrunner.

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