Samvardhana plans overseas bond sales to raise over $500 million

economictimes.indiatimes.com:

Samvardhana Motherson International (SAMIL), formerly Motherson Sumi, is looking to raise funds by issuing overseas bonds after five years. The company is gauging investor interest as it aims to garner more than $500 million equivalent through euro or dollar or yuan -denominated bond sales for growth and capital expenditure. The company roped in HSBC to reach out to investors in a non-deal roadshow earlier this week and it may consider issuing overseas bonds in the second half of the financial year, two sources said.

They said that the size, pricing and tenor are yet to be finalised. A company spokesperson did not immediately respond to a request for comment. The company is looking to borrow shorter tenor funds through banks and long-term funds through bonds.

The two outstanding bonds have 7- and 10-year terms and are due in 2024 and 2025. The tenor of the bond will be over 5 years. While the size is not yet decided it can raise around $500 million.

At present, the group has two bonds outstanding — ₹300 million due July 2024 and ₹100 million due June 2025. The ₹300 million 1.8% bond due 2024 is trading at 96 cents with yield at 6% while the ₹100 million 3.7% bond due 2025 is at 93 cents with yield at 7.47%. The funds raised through the bond issuance could be utilised for growth needs, even though the company has enough liquidity to fund its latest acquisitions, added the source.

Earlier this year, the company's wholly-owned subsidiary, Samvardhana Motherson Automotive Systems Group BV (SMRP), announced the acquisition of a 100% stake in SAS Autosystemtechnik GmbH (Germany) from Faurecia SE. The transaction, valued at ₹540 million, is expected to be completed by September 2023. In March SAMIL's subsidiary SMP Automotive