Medis delays $50 million of perpetual convertible preferreds; new timing not set

By Kenneth Lim

Boston, Nov. 3 - Medis Technologies Ltd. has delayed its planned $50 million offering of perpetual convertible preferred stock, and a new pricing date has not been set.

"It's on day-to-day timing," a market source said.

Syndicate sources declined to comment on the reasons for the delay, but a sellsider said that word on the Street was that the delay was over an internal issue, not due to demand.

Citigroup is the bookrunner for the Rule 144A offering.

The deal, which was expected to price Thursday after the market closed, was talked at a dividend of 6.5% to 7.25% and an initial conversion premium of 28% to 32%.

The 5,000 preferred shares were to be offered at par of $10,000 apiece. There is a concurrent shelf offering of up to 1.5 million shares of Medis common stock, which have yet to price.

There is an over-allotment option for a further $7.5 million, or 750 preferred shares, in the convertible deal.

The preferreds were to be non-callable for the first three years, after which they may be called subject to a 150% hurdle. There were no puts.

The convertibles had dividend and takeover protection.

Medis, a New York-based maker of fuel cell batteries used in consumer and military electronics, said the proceeds of the offering would be used for developing and commercializing products, which may include capacity expansion, and for general purposes.

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