Headwaters to repay debentures with stock-sale proceeds

New York, Dec. 8 - Headwaters Inc. (B3) said it plans to sell new stock and use a portion of the net proceeds to repay its $20 million of outstanding 18% senior subordinated debentures due 2007. Including pre-payment charges, the total amount comes to $20.4 million.

Headwaters, a South Jordan, Utah-based provider of technologies to the energy industry, said that subject to market conditions, it will offer for sale 4.75 million shares of new common stock, with underwriters having a greenshoe option to purchase an additional 712,500 shares.

The company estimates likely net proceeds from the stock sale of about $84.3 million, assuming a price to the public of $19.05 per share, the level the company's shares closed in Nasdaq dealings on Friday. If the underwriters exercise their greenshoe fully, Headwaters expects net proceeds to total about $97.1 million.

Besides the $20.4 million to be spent on repayment of the debentures, the company expects to spend $30 million of the net proceeds to repay part of its variable-rate senior secured debt due 2007; as of Nov. 30, outstanding senior secured debt totaled about $105.1 million, including $2.9 million of original issue discount.

Headwaters plans to use the remaining proceeds for general corporate purposes, including future use of a portion or all of the remaining net proceeds to fund acquisitions of complementary businesses in the chemical, energy, building products and related industries.

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