BRUSSELS Jan 21 Belgian pharmaceutical company UCB said on Tuesday it had exercised an option to redeem its convertible bonds earlier than scheduled, leading to a potential dilutive effect on earnings of 6 percent.
The company said it would redeem the 4.50 convertible bonds due in 2015 on March 12, 2014, at par together with interest until that date.
Bondholders also have the right until March 5 to convert their bonds into shares at a price of 38.746 euros. UCB stock closed at 51.32 euros on Monday.
Excluding bonds held by a UCB subsidiary, the outstanding amount of the bonds is 430 million euros ($583 million).
Assuming all are converted, there would be a dilution of UCB stock of 6.05 percent, although the overall dilution to earnings per share would be less because UCB would not have to pay future interest coupons.
The company was entitled to exercise this option as a result of the parity value of the bonds being above 65,000 euros on each of the 20 trading days until Jan. 20.