Lonrho (LON:LONR) has completed its recently announced convertible bond issue, raising US$60 million.
The company believes it can raise a further US$10 million due to significant demand.
"We are delighted that the demand for a convertible bond in Lonrho has been so strong,” chairman David Lenigas commented.
“It is gratifying that so many of our existing institutional shareholders have taken part in the offer.”
“Likewise, I believe it is positive for the company that some very large new institutional investors that were not previously on the Lonrho register have subscribed.”
The bonds mature in 2015 and they will pay interest at 7% per annum, in semi-annual payments.
They are convertible into ordinary shares at £0.1559 per share, a 25% premium (to the volume weighted average price between 5 October and 7 October).
Lonrho announced the fundraising last week.
The net proceeds will allow Lonrho to repay debts and accelerate the growth in its operations, particularly in the agricultural division.
"This convertible bond offering will allow the company to take advantage of new opportunities to significantly enhance shareholder value,” Lonrho chairman David Lenigas said.
“Over the past few months the Lonrho Agricultural division has seen an increase in demand from the USA retail market for fish and other produce from Southern Africa.”
“The primary use of the funds being raised will permit the company to meet the logistical, processing and delivery requirements emanating from this exciting and significant market."
Lonrho’s agriculture division comprises of the Rollex produce distribution business, Oceanfresh Seafoods and Fresh Direct, a fruit and vegetable farming and export business). The business unit is also the John Deere distribution franchisee for Angola and Mozambique.