October 5, 2018 / 11:07 PM / 6 months ago

Brazil's Taurus launches capital increase plan as stocks soar

SAO PAULO, Oct 5 (Reuters) - Brazil’s Forjas Taurus SA , whose shares have been going up sharply due to the prospect of a victory of arms-backer presidential candidate Jair Bolsonaro, launched on Friday a plan to raise capital to pay down debt.

Taurus, Brazil’s largest arms manufacturer, said it will launch several series of bonds totaling 74 million units that could be converted into shares of the company next year and in 2020.

Considering the possibility of all buyers of the bonds to opt to convert them into shares, the company could raise around 400 million reais ($104.26 million).

“The plan has the main objective to reduce the company’s debt,” said the firm in a market filing.

Current shareholders will have preference to subscribe to the new convertible bonds.

Taurus shares gained 12.4 percent on Friday, as polls continue to show an increase in voting intentions for right-wing Bolsonaro, who defends the relaxation of strict arms use legislation in Brazil. Shares are up 160 percent this year.

$1 = 3.8364 reais Reporting by Marcelo Teixeira; Editing by Sandra Maler

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