Bollywood film specialist Eros International (US:EROS) wants investors to dance to its tune. The group, which boasts an Indian film library of over 2,300 titles, has launched a retail bond on the London Stock Exchange's ORB trading platform which offers a 6.5 per cent yield and expires in 2021.
Eros, which used to be listed on Aim but floated on the New York Stock Exchange in November, is one of the first media companies to raise money in this fashion. But it’s no stranger to fundraising – it raised $92m in net proceeds from a share placing in July.
Investors should feel confident buying the bonds. Eros’s net debt stood at $126m at the end of June, or 22 per cent of its equity, so it isn’t drowning in debt by any means. It may simply wish to diversify its sources of funding.
Eros is also performing strongly. Its constant-currency sales rose 15 per cent in the quarter ended June 30, while its adjusted full-year cash profits leapt 43 per cent to $80m last year. That reflects strong demand for Indian films worldwide – Eros produces more than 70 films annually that are shown in over 50 countries.
Buying the bonds requires an initial payment of £2,000 and further subscription amounts can be paid in multiples of £100. The offer opens on 25 September and is scheduled to end on 9 October, although it may close earlier. Investors in the bonds will receive a payment twice a year, on 15 April and 15 October, starting from next April. They may also sell the bonds at any time.
