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UPL raises $300 mn with huge investor response

MUMBAI: Agro-chemicals company – UPL (United Phosphorus), ha..

MUMBAI: Agro-chemicals company – UPL (United Phosphorus), has raised $300 million by selling dollar-denominated bonds to overseas investors as it plans to refinance its high cost debt.

The bond-sale has obtained six times higher subscription signalling a strong demand for Indian papers among overseas investors.

The company has raised the money through its Mauritius-based subsidiary UPL Corporation, which takes care of the global businesses, two people familiar with the matter told ET. Overseas businesses contribute significantly to its revenues.

The company could not be contacted immediately for comments.

“About three-fourth of the proceeds would be used to refinance long term expensive overseas loans while the rest will help extinguish high cost short-term debt,” said one of the persons cited above.

Those securities offered 4.5% which was priced after adding 173 basis points over the benchmark US Treasury yields with 10-year maturity.

Bank of Tokyo-Mitsubishi UFJ (MUFG), Credit Suisse, ANZ (Australia and New Zealand banking group), DBS Bank, JP Morgan were some of the banks that helped the company arranging the money.

Initial price guidance was about 200 bps. Robust investor demand brought it down to by 27 basis points with the company receiving nearly $ 1.8 billion worth of investor interest. It rejected the excess subscription beyond the proposed size.

The bond-sale, known as Regulation S in market parlance, was available to investors outside the US.

Asset managers and fund managers have invested covering more than three-fourth of the issue size while banks, insurers too have bought the UPL papers. Investors across Asia are the major contributors.

Even though the company has attained a finer pricing it would have saved another 20-30 basis points had the US Treasury yields not hit four-year high, said an executive involved in the money mop-up.

During October-December quarter, UPL reported a net profit of Rs 145 crore as against net loss of Rs 50 crore in the corresponding period a year ago.

Earlier in October, United Phosphorous Ltd (UPL) planned to invest Rs 6,000 crore setting up a plant that will manufacture agro-chemicals and intermediates at Dahej in South Gujarat.

The proposed plant will be set up at Dahej-3 industrial estate under the Gujarat Industrial Development Corporation (GIDC) in Bharuch district. The state government is expected to allocate a 600,000 sq ft plot in GIDC.

Original Article


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