Kia Motors UK has been named Car Maker of the Year by the leading motor trade magazine AM in its 2009 Awards. Praising the company for its “increasingly strong” relationship with its dealers and for its “clear strategy” the award was presented by BBC News anchor Huw Edwards to Paul Philpott, Managing Director of Kia Motors (UK) Ltd.
The AM Awards, held in Birmingham, are judged by a panel of industry experts and analysts headed by editor Stephen Briers and reflect excellence in the UK motor trade with a particular reflection of views from the trade itself. Kia beat off stiff competition from Audi, BMW, Jaguar, Mini and Suzuki to win the title.
It’s not all good news, however for the No. 2 in Korean car manufacturing. Kia Motors Corp. is considering issuing “bonds with warrants” to shore up its balance sheet amid the global credit crisis, a senior company executive said on Thursday.
“We have no choice but to mull issuing (bonds with warrants) as we need to improve our financial structure. A normal bond issuance would carry too high interest,” the executive told Reuters by telephone, asking not to be identified as he was not authorised to speak to the press.
He declined to comment on the size of any proposed issue, which would give bond holders certain rights to convert their debt into new shares.
A Kia spokesman confirmed the company was considering the plan and concerns were raised that such a bond issue may dilute exisiting shareholders’ stakes. The share price traded at 7.4 percent down on the news.
In finance, a warrant is a security that entitles the holder to buy stock of the company that issued it at a specified price, which is usually higher than the stock price at time of issue.
Warrants are frequently attached to bonds or preferred stock as a sweetener, allowing the issuer to pay lower interest rates or dividends. They can be used to enhance the yield of the bond, and make them more attractive to potential buyers. Warrants can also be used in private equity deals. For instance, it was a common practice during the height of the dot-com bubble for a landlord of sought-after commercial real-estate to demand warrants from high-tech startups as part of the lease agreement. Also, accredited investors who parcipate in PIPEs often receive 50%-100% warrant coverage based on the type of deal structure and their investment. Frequently, these warrants are detachable, and can be sold independently of the bond or stock.