US equipment provider Motorola has bought back US$361.8m of its outstanding bonds. The company’s bondholders had offered to sell back nearly US$400m under the terms of Motorola’s Dutch Auction that closed on June 22.
This brings the amount of debt that…
US equipment provider Motorola has bought back US$361.8m of its outstanding bonds. The company’s bondholders had offered to sell back nearly US$400m under the terms of Motorola’s Dutch Auction that closed on June 22.
This brings the amount of debt that Motorola has bought back to US$500m. The company still has US$1.1bn outstanding.
Under a structure now taking shape, Motorola is planning to buy back most of its debt and transfer the bulk of its remaining cash – roughly US$3bn to US$4bn – to a separately traded company centred on the its mobile phone business.
The buyback included a 6.5% bond maturing in 2025; a 6.5% bond maturing in 2028, and 6.625% Senior Note maturing in 2037.
Motorola made a first-quarter profit of US$76m, against US$449m loss for the same period last year, as a stronger US economy lifted its networks and enterprise divisions, while its marquee handset unit continued to struggle in the sharply competitive smartphone market.
Analysts were cautiously optimistic. Charles Stanley’s media analyst, Tom Gidley-Kitchin said: “Motorola has been through a tough time over the last few years. But with its new Android operating system and handsets, it looks like the company might be turning a corner. A review of its debt portfolio can only strengthen that bounce back.”
Motorola shares closed at US$7.17 on 22 June. The stock is down 7.6% year to this date.
J.P. Morgan, Deutsche Bank and HSBC acted as Lead Dealer Managers and Global Bondholder Services Corporation served as the Depositary and Information Agent.