MILAN — Italy’s Bulgari SpA on Wednesday placed 130 million euros, or $181.4 million, of equity-linked bonds due in 2014 to diversify its sources of funding and lengthen its debt maturity profile.
“The proceeds of the offering will be used for general corporate purposes,” Bulgari stated.
Goldman Sachs, which is managing the issue, set the bonds’ coupon at 5.4 percent per annum and conversion price at 5 euros, or $6.98 — a premium of 33.6 percent over the weighted average price of shares during morning trading on Wednesday.
Dollar figures were converted at average exchange rates for the periods to which they refer.
The settlement and delivery of the bonds is slated for the second week of July and could rise to a maximum of 150 million euros, or $209.3 million, if an overallotment option is exercised in full, Bulgari said.
Bondholders will be able to redeem the notes in cash or shares.
Bulgari chief executive officer Francesco Trapani said he was “very satisfied” with the placement, which had already been approved by the firm’s majority shareholders.
“I am therefore sure that this operation, together with the reduction of costs, which is already being carried out, will make Bulgari even stronger financially, allowing the company to be well-positioned” when the markets recover, Trapani stated.
Bulgari has been hit hard by the downturn as consumers rein in spending on discretionary items, particularly jewelry, watches and accessories. After reporting a 29.3 million euro, or $38.3 million, loss in the first three months of the year — its first-quarterly loss in a decade — following a 23 percent drop in revenues, the company is cutting jobs, reducing the number of products and closing unprofitable stores.
Last month, Bulgari reached agreement on a 180 million euro, or $251.1 million, three-year line of credit with a pool of banks. As of March 31, the jeweler had net debts of 339 million euros, or $443.4 million.