VIENNA, July 28 (Reuters) - Austrian oil and gas group OMV said on Tuesday it planned to issue a new bond of up to 1.5 billion euros ($1.8 billion) to partly fund its purchase of plastics maker Borealis.
OMV had agreed to buy a 39% stake in plastics maker Borealis for $4.7 billion from its key investor Mubadala before the coronavirus crisis.
The purchase, which lifts OMV’s stake in Borealis to 75%, aims to strengthen its position in the industry and in the Middle East.
Analysts have said the purchase made strategic sense but said much depended on whether OMV could complete a planned 2 billion euro asset sale to help finance the deal.
OMV said it intended to issue the new bond within the next 12 months.
“The potential new hybrid bond shall have no maturity date and may be redeemed by OMV on certain dates and under certain conditions,” it said.
A hybrid bond combines debt and equity elements, the most common types are convertible into shares after a certain period.
OMV publishes second-quarter results on Wednesday.
$1 = 0.8537 euros Reporting by Kirsti Knolle; Editing by Edmund Blair