South African investment firm Brait has fallen short in its tender for a portion of its R3bn (US$158m) convertible bonds with only R99m secured against a target of R400m.

The company sold 4m shares in December for R444m to fund the purchase. It raised R1.5bn in a rights issue in August, with take-up of 96.1%, when it said it would reduce the bond by R750m that was issued by Mauritian subsidiary Brait Investment Holdings.

The December 2027 bonds pay a cash coupon of 5.75% and 0.25% in PIK form.

A lacklustre response is little surprise as the company chose not to incentivise investors by buying bonds back at par value, which represented a 0.1% premium to the market price when the offer launched.

Bonds were repurchased at R750.58 plus R5.55 accrued interest for a total R756.13.

In 2020, a CB tender by the company also failed to elicit investor interest when it tried to buy back paper at 99 eight weeks before maturity at par.

Source: IFR