Chow Tai Fook Jewellery Group is seeking HK$7.85 billion (US$1 billion) from the sale of one of Hong Kong’s biggest convertible bonds this year.
The convertible bonds, denominated in Hong Kong dollars, will be due around the end of June 2030, and will carry a coupon of zero to 0.5 per cent payable semiannually, according to the terms of the deal seen by Bloomberg News. Proceeds will be used for the jewellery business and general working capital, according to the terms.
Chow Tai Fook, which recently reported better-than-expected earnings, has been campaigning to lift its image, positioning itself closer to premium labels such as Tiffany and Cartier instead of a traditional gold retailer.
The offering comes as New World Development, which is controlled by the family of Henry Cheng Kar-shun that also controls Chow Tai Fook, grapples with more than HK$200 billion of liabilities as Hong Kong’s most indebted major developer.
03:22
The story of Chow Tai Fook – from goldsmith to jewellery conglomerate
The story of Chow Tai Fook – from goldsmith to jewellery conglomerate
UBS Group, the sole bookrunner of the deal, is proposing to conduct a share placement aimed at facilitating hedging for investors buying the bonds, according to the terms. As part of that placement, Chow Tai Fook will buy back as much as HK$1.57 billion of shares.
