Bollywood film company Eros International yesterday announced plans to tap the retail bond market, the first media company to use the burgeoning asset type to raise cash.
Eros, which makes about 70 films a year and has a library of a back catalogue of about 2,300 films, will raise the cash through a seven-year bond maturing in October 2012. The bond, which has a minimum investment of £2,000, will pay a fixed rate of interest of 6.5 per cent, to be paid to investors twice a year, in April and October.
Eros said it wanted to raise the money to diversify its sources of funding and the currency.
“This bond provides exposure to a new sector for retail bond investors and will also enable Eros to diversify the sources and currency denominations of its funding,” Eros chief executive Jyoti Deshpande said.
Investec Bank has been mandated to lead the transaction. Authorised distributors of the bond include Barclays Stockbrokers, Interactive Investor, Redmayne-Bentley Stockbrokers, Selftrade and Smith and Williamson.
Eros was founded in 1977 and listed on the New York Stock Exchange in 2013. It has a market cap of about $900m (£550m) and normally has three of India’s top grossing films every year.