Metalico exchanges $5 million convertible debt for 1,245,354 shares

By Devika Patel

Knoxville, Tenn., April 24 - Metalico, Inc. said it has begun a two-tranche debt-for-equity exchange with holders of $5 million of its convertible notes. This transaction could reduce the company's overall debt by about $10 million.

Metalico exchanged 1,245,354 common shares for $5 million of its 7% senior unsecured convertible notes due April 30, 2028.

The number of shares that the company issued had a value equal to $580 per $1,000 of notes, based on a per share price of $2.32866.

The exchange agreements also provide for a "true-up" of the shares or the debt to be retired based on the price of the common stock during a 25-day trading period following the exchange.

If the price of the stock maintains a predetermined level at the end of the true-up period, the company will exchange additional shares for another $5 million in notes.

If the volume-weighted average price of the common stock is at least $1.50 per share for both the single day and the 10-day period ending on the fifth trading after the end of the first 25-day trading period described above, then Metalico will conduct a second exchange on the same terms with the per-share exchange price calculated based on the 10-day volume-weighted average price.

Metalico is a Cranford, N.J., scrap metal recycler and lead products fabricator.

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