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South Africa's Steinhoff to sell $1.2 bln in convertible bonds

JOHANNESBURG (Reuters) - South African furniture group Steinhoff will sell bonds worth 1.1 billion euro ($1 billion) convertible into stock to fund share buy backs, it said on Thursday. Steinhoff, which operates in Africa, Europe and Australia, set the conversion price at 103.4 per share, about 35 percent premium to its current price and at the bottom-end of an earlier announced range. Shares in Steinhoff were 1.1 percent lower at 76 rand by 1425 GMT, reflecting the dilutive impact of the bonds. If all bonds are exchanged for shares, they would add about 150 million new shares and dilute the existing shareholding by about 4.1 percent. The 2022 bonds carry a coupon of 1.25 percent, at the upper-end of what Steinhoff had aimed for and is payable twice a year. Steinhoff, rated Baa3 with a stable outlook by Moody's, said it has made substantial progress towards its proposed listing on the Frankfurt Stock Exchange. Johannesburg-based Steinhoff has been seeking a listing in Europe, where it makes the bulk of its profits, to enhance its capital structure. ($1 = 0.9153 euros)