Italian clothing company OVS S.p.A. has decided to issue a sustainability-linked bond of up to 200 million euros with a duration of six years. If that sounds familiar - other industry giants like H&M, Burberry and Adidas also recently discovered the value of sustainability-linked bonds.
OVS’ board of directors of OVS met on Monday and resolved to issue an unrated, unsecured, non-convertible and unsubordinated senior sustainability-linked bond linked to sustainability performances for a principal amount between a minimum of 150 million euros and a maximum of 200 million euros, addressed to both institutional investors in Italy and abroad and retail investors in Italy. One of OVS’ main shareholders, Tamburi Investment Partners, has already expressed interest to subscribe to the new bond.
“With the issuance of this bond, the financial structure of the Group, already strengthened thanks to the recent capital increase and excellent performances in terms of cash flows, will be further improved thus allowing a consequent reduction in the cost of debt,” said the company in a statement.
“In addition,… financial resources will be released to activate also technological innovation initiatives aimed at energy saving, including the realisation of photovoltaic panels, the replacement of lighting systems with others having less heat loss, the digitalisation of control systems and the energy management of the shops,” added OVS.
The duration of the bond is set at six years from the date of issue, with a minimum interest rate of 2 percent on an annual basis. The Bond will be issued at 100 percent of the nominal value, with a denomination equal to 1000 euros and will be offered for subscription through the Italian electronic bond and government securities market (MOT), organised and managed by Borsa Italiana S.p.A.
The proceeds of the offer will be used for the early repayment of the existing financial indebtedness of the Group, extending the maturity date of the available lines of credit and therefore allowing to release resources dedicated to investments in the circular economy.
The third quarter continues “in a very favourable way” according to OVS. “The delivery delays suffered are to date largely recovered and recent inflationary pressures are not considered a threat to our industry; the guidance for the year provided upon the publication of the results for the first half of the year is therefore fully confirmed.”