GOME To Issue $300 Million in Convertible Bonds

HONG KONG (Reuters) – GOME (0493.HK) said on Wednesday that it plans to issue 2.05 billion yuan ($300.3 million) in convertible bonds, with the proceeds to be used for the redemption and repurchase of convertible bonds and general corporate purposes.

The Chinese electronics retail chain operator said the 3 percent bonds due 2014, with an option to issue an additional 340 million yuan in bonds, were convertible into 955.92 million shares, or 5.97 percent of its enlarged share capital, at HK$2.838 each, a 29 percent premium over the latest closing price.

Its shares were down 2.3 percent at HK$1.94 in early trade.

JPMorgan (JPM.N) is the bookrunner for the offering.

In June, U.S. private equity firm Bain Capital agreed to invest up to $418 million in the company. The deal came after shares of the company sank and were suspended for seven months following reports that GOME’s ex-chairman and founder, Huang Guangyu, was being investigated for alleged financial irregularities. For statement please click here (US$1=HK$7.75=6.826 yuan) (Reporting by Donny Kwok and Michael Flaherty; Editing by Chris Lewi)