By Stephanie N. Rotondo
Seattle, Nov. 7 – Eastman Kodak Co. sold $200 million of 5.5% series A convertible preferred stock to Southeastern Asset Management, the company said in a press release on Monday.
The $100-par convertible preferreds are convertible into common stock at a conversion price of $17.40 per share, a 20% premium over Friday’s closing share price of $14.50.
On an as-converted basis, the preferreds equate to 11.5 million common shares, or 21% of the outstanding equity.
Beginning two years after issuance, the preferreds will be convertible into common stock if the closing stock price equals or exceeds $21.75 for 45 trading days within a 60-day period. Any unconverted preferreds will be redeemed five years from issuance at par plus accrued dividends.
The transaction is expected to close in November.
Proceeds will be used, along with cash on hand, to prepay in full its outstanding second-lien term loans. Kodak inked an amendment to its revolving ABL credit facility to allow for the prepayment and to permit the payment of cash dividends on the preferreds.
Kodak is a Rochester, N.Y.-based imaging company.
| Issuer: | Eastman Kodak Co.
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| Securities: | Series A convertible preferred stock
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| Amount: | $200 million
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| Mandatory redemption: | 2021
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| Dividend: | 5.5%
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| Price: | Par of $100
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| Yield: | 5.5%
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| Conversion price: | $17.40 per share
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| Conversion premium: | 20%
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| Conversion option: | Convertible beginning two years after issuance if closing stock price equals or exceeds $21.75 for 45 trading days within a 60-day period
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| Pricing date: | Nov. 7
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| Purchaser: | Southeastern Asset Management
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| Stock symbol: | NYSE: KODK
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| Stock price: | $14.50 as of Nov. 4 close
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| Market capitalization: | $629.52 million
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