Emcore holders to convert 97.5% of 5.5% convertibles; remainder called

By Jennifer Chiou

New York, Jan. 30 - Emcore Corp. said that holders of $83.3 million, or 97.5%, of its 5.5% senior subordinated convertible notes due 2011 agreed to convert their holdings into 11.9 million shares.

As an incentive, the company agreed to pay a 4% premium plus accrued interest.

Emcore said that the conversion will save it $4.8 million annually in interest expense.

The company also called the remaining $2.1 million of notes at par plus accrued interest up to the Feb. 20 redemption date.

The notes are convertible through Feb. 19 at a conversion price of $7.01 per share. Emcore's stock (Nasdaq: EMKR) closed at $11.77 per share on Jan. 29.

On April 13, 2007, the company said it repurchased $11.43 million of its 5.5% convertibles at par plus accrued interest.

The repurchase was made under an agreement Emcore reached with holders of a majority of the notes on April 9, 2007, under which the noteholders gave Emcore the option to buy back 12% of the notes they held and agreed to waive until Feb. 29 any default related to the company's failure to file its 10-K annual report for the fiscal year ended Sept. 30, 2006 and its 10-Q quarterly report for the quarter ended Dec. 31, 2006.

In return, Emcore previously agreed to increase the coupon on the notes to 5.5% from 5% and cut the conversion price to $7.01 from $8.09.

Emcore is an Albuquerque-based provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and solar power markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.