India's Ballarpur International Graphic Paper prices US$200M perpetual non-callable 5/10 year bond offering at 9.75%, marking debut transaction in international bond markets

NEW DELHI , August 5, 2011 (press release) – • Avantha Group!s Ballarpur Industries Limited (BILT), makes its debut in the offshore bond market
• BIGPH is a step down subsidiary of BILT which issued subordinated perpetual capital securities of US$ 200 mn
• First true US dollar perpetual capital security from India & first non-listed hybrid issuer in Asia
• The bonds are treated as 100 per cent Equity under IFRS and get 50% credit from rating agencies. This issuance hence will improve the capital structure significantly.

Ballarpur International Graphic Paper Holdings (BIGPH), a step down subsidiary of Ballarpur Industries Limited, India!s largest paper company and part of the US$ 4 bn Avantha Group, successfully navigated turbulent market conditions to price a US$ 200 mn perpetual non-callable 5 / 10 year bond offering at 9.75% pa. This is BIGPH!s debut transaction in the international bond markets.

The transaction represents many firsts, most notably being the first true US dollar perpetual capital security from India, the first instance of an Asian issuer making debut through issuance of a perpetual capital security, Asia!s first non-listed hybrid issuer, and Asia!s first non-investment grade US dollar new issue since May 2011

Prior the launch of the transaction, BIGPH conducted roadshows in Singapore, Hong Kong, London, Zurich and Geneva between July 28th and August 2nd and met key fixed income investors. Despite extremely volatile market conditions, there was strong investor interest in the transaction during the roadshows which helped the issuer announce a price guidance of 9.75% area. The transaction was immediately met with strong demand from Private Banks across Asia and Europe, with orderbooks growing in excess of US$ 300 mn by London open. The quality of the oversubscribed orderbook (substantially led by real money demand) allowed BIGPH to price at the guidance of 9.75% for the desired deal target size of US$ 200 mn.

A very high quality distribution was achieved with interest from a highly diversified investor base. In terms of geography, Asian investors were allocated 77%, Europe 21% and US 2%. In terms of investors, private banks were allocated 77% of the issue, fund managers 19% and banks 4% took the balance pie.

HSBC and Royal Bank of Scotland were the joint rating advisors, structurers and bookrunners to the offering.

Mr B. Hariharan, Group Director " Finance, Avantha, said, #Despite an extremely challenging market backdrop, strong investor confidence that allowed us to price the transaction intraday at our desired size and price level. This is truly a first of its kind instrument by any Indian corporate group, and Ballarpur is pleased to have undertaken this pathbreaking transaction. The instrument has been structured to meet the strategic needs of our company and the investor response confirms their confidence in our strategic business plan$

About Avantha

The US$ 4 bn Avantha Group is one of India␣s leading business conglomerates. Its successful entities include BILT, Crompton Greaves, The Global Green Company, Avantha Power & Infrastructure, Solaris ChemTech Industries, Biltech Building Elements, Salient Business Solutions, and Avantha Technologies. With an impressive global footprint, Avantha operates in more than fifteen countries, employing 20,000 people worldwide. The Group has business interests in diverse areas including power transmission and distribution equipment and services, paper and pulp, energy and infrastructure, food processing, farm forestry, chemicals, IT and ITES. Led by Gautam Thapar, Avantha demonstrates strong leadership globally and emerges as a focused corporate, leveraging its knowledge, leadership and operations, adding lasting value for its stakeholders and investors.

About BIGPH

Ballarpur International Graphic Paper Holdings Limited (BIGPH) is a subsidiary of India␣s largest paper company, Ballarpur Industries Limited (BILT).It is part o the US$ 4 bn Avantha Group. BIGPH, in turn, has one subsidiary each in India and Malaysia: BILT Graphic Paper Products Limited (BGPPL) and Sabah Forest Industries (SFI), Malaysia␣s largest pulp and paper company. BGPPL has under its purview three units: Ballarpur, Bhigwan (both in Maharashtra) and Kamalapuram (Andhra Pradesh). These three units focus on the manufacture of bulk coated and uncoated paper and viscous grade fibre pulp.

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