Telecom operator completes tender offer to purchase some of its own bonds
Bahrain Telecommunications (Batelco) has completed a tender offer to buy back some of its own bonds, purchasing $131.4 million of debt, the state-run firm said on Wednesday.
Batelco had previously been largely debt-free, but last April sold a $650 million seven-year bond with an annual coupon on 4.25 percent to help fund its $570 million acquisition of Cable & Wireless Communications' Monacoand Islands Division.
Some aspects of the deal subsequently ran into regulatory problems and CWC returned the $100 million Batelco paid for a stake in a holding company that ultimately owns part of Monaco Telecom, leaving Batelco with what analysts considered to be excess cash on its balance sheet.
The firm has sought to rectify that; it bought back $39.5 million of its debt by last Dec. 31, and in March launched a tender to acquire a further $200 million of its bonds.
Debt holders tendered $136.1 million of bonds and Batelco agreed to buy back $131.4 million of them, a company statement on Wednesday said.
The company expects to settle the buy-back on Friday and will pay accrued interest on the notes.
"This transaction has afforded Batelco the opportunity to deploy excess liquidity in managing debt levels and realizing future interest savings," the Batelco statement said.
Batelco had cash and cash equivalents of BD195.1 million ($517.5 million) at the end of 2013, according to its annual results, more than double those of a year earlier.
Separately, Batelco said it has appointed Alan Whelan as group chief executive, nearly 11 months after its former CEO quit the company. Whelan replaces Sheikh Mohamed bin Isa al-Khalifa, who quit last May.