Taliwrks ... Dec09

It has proposed to issue RM395 million of secured bonds 2009/2024 which would partly finance the early redemption of its convertible bonds will expire in 2012.

The 2009/2024 bonds would be issued via its special purpose vehicle, Destinasi Teguh Sdn Bhd, which would act as a funding conduit to raise funds for the group. This funding exercise will better suit the group's long-term financing needs and mitigate the early redemption risk of the convertible bonds which will arise by end of 2010.

Funds raised from the proposed 2009/2024 bonds would be used to redeem 50% of the RM225 million nominal value of 2.25% convertible bonds 2007/2012.

It had on Dec 17 entered into a bond purchase agreement with the holders of the 2007/2012 bonds to purchase 50% of the bonds. The purchase of the sale bonds at RM119.36 million prices at approximately RM1.065 million for every RM1 million nominal value of the convertible bonds will be undertaken on Dec 23 2009.

Part of the proceeds raised from the proposed bonds issue was to redeem 50% of the 2007/2012 bonds. However, due to a possible delay in the implementation of the proposed private debt securities (PDS), it had offered to purchase the bonds to reduce the financing costs.

When the proposed PDS is implemented, Taliworks would create a cash security for the outstanding RM113 million nominal value of the convertibles and deposit RM125.74 million in an account in favour of the trustees and for the benefit of the bondholders.

As at Sept 30 2009, about RM180.07 million remained unutilised from the proceeds raised from the issuance of the convertible bonds. It would use part of the unutilised proceeds to purchase the convertible bonds.