Vodafone launching 2.9 billion pounds bond offer
Vodafone said the bonds would be issued in two tranches - 18 month maturity and three year maturity. They would be convertible into ordinary shares, in which case they would represent 5% of Vodafone's current share capital.
"The initial conversion price will be determined on the basis of the higher of £2.1730, being Vodafone's closing share price on the London Stock Exchange on February 17, or the arithmetic average of the daily volume-weighted average prices of an Ordinary Share on the LSE over a period of three consecutive scheduled trading days starting on 19 February," the company's board confirmed.
It would announce the conversion price following close of trading on February 23.
There was the potential for Vodafone to buy back shares following coversion of the bonds in order to mitigate dilution, using the proceeds from its disposal of $5bn (£3.5bn) in Verizon loan notes.
The company said it also planned to hedge its exposure to share price movements during the term of the bonds via an option strategy. ■