New York, Feb. 4 – General Communication, Inc. closed on the placement of a $75 million unsecured promissory note with Searchlight ALX, LP, according to an 8-K filing with the Securities and Exchange Commission.
The note will pay interest at 7.5% in cash or in kind. If interest is paid in kind then General Communication must also issue 0.04 of a stock appreciation right for each $1 of capitalized interest.
The note matures in eight years.
General Communication also issued three million stock appreciation rights to Searchlight which are exercisable for eight years at the excess of the fair market value of a share of General Communication’s class A common stock over the exercise price of $13.00. The rights may be settled in cash or stock.
Proceeds from the note were used to help fund the acquisition of Alaska Communications Systems Group, Inc.’s wireless subscriber base and its one-third interest in Alaska Wireless Network, LLC. Remaining proceeds will be used for general corporate purposes.
General Communication is an Anchorage, Alaska telecommunications provider.
| Issuer: | General Communication, Inc.
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| Issue: | Unsecured promissory note
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| Amount: | $75 million
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| Maturity: | Eight years
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| Coupon: | 7.5% in cash or PIK
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| Stock appreciation rights: | Three million, exercisable for eight years at excess of fair market value of General Communication’s class A common stock over the exercise price of $13.00
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| Call: | After four years
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| Investor: | Searchlight ALX, LP
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| Settlement: | Feb. 2
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