* Exchange price at 20 pct premium
* Annual interest 1.25 pct for four years
* Investors baulked at initial guidance of 0.375-1.00 pct
* Part of portfolio repositioning by GBL
(Updates after completion of placement)
BRUSSELS, Jan 24 Belgian holding company GBL
plans to cash in almost half its stake in French
energy firm GDF Suez with 1 billion euros ($1.33
billion) of exchangeable bonds, raising cheap cash to diversify.
GBL, run by Belgium's richest man, Albert Frere, said on
Thursday it had sold the four-year bonds at an annual coupon of
1.25 percent, a low level but above the initial guidance of
between 0.375 percent and 1 percent.
GBL was forced to revise its offer after investors baulked
at terms they considered too expensive, IFR reported.
The bonds will convert into GDF Suez shares in 2017 at a
premium of 20 percent over a price based on Thursday's trading
level, though GBL could choose to pay back bondholders in cash.
GBL has already sold its stake in chemicals company Arkema
, part of its stake in drinks maker Pernod Ricard
and about 400 million euros of bonds exchangeable into
shares of Suez Environnement. The combined sales have
raised about 1.4 billion euros.
KBC Securities said the latest sale was unexpected, but that
it brought GBL cheap funding and allowed it to reduce an
investment that had underperformed in recent years. GDF Suez
shares have lost about half their value over the past four
"The company is repositioning itself; thinking about its
future, thinking about its capital allocation," KBC Securities
analyst Tom Simonts said.
GBL said that it would also take a 758 million euro
impairment on its 5 percent stake in GDF Suez, the shares of
which fell 25 percent last year.
In addition to its GDF Suez stake, the Belgian company holds
21 percent of cement company Lafarge and 4 percent of
oil major Total.
Chief Executive Frere said that he considered the remaining
stake in GDF Suez to be an important asset and he remained
confident in the energy group's prospects.
"It is in this context that GBL has chosen a financial
instrument providing exposure to the future, the share price
appreciation and at the same continued collection of the
dividends," Frere said in a statement.
GDF Suez said: "As our shareholder explains, this is a
financing operation for them. This operation has no impact on
the shareholding of GDF Suez, since GBL will maintain its
participation, the exchange only taking place in January 2017."
GBL shares closed up 0.49 percent at 61.73 euros, against a
0.07 percent gain on the STOXX Europe 600 Utilities index
Bookrunners for the placement are BNP Paribas Fortis,
Deutsche Bank, Societe Generale Corporate & Investment Banking
and UBS. Rothschild is acting as financial adviser.
($1 = 0.7530 euros)
(Reporting By Ben Deighton; Additional reporting by Geert De
Clercq in Paris; Editing by Philip Blenkinsop and Helen