Convertible preferreds will fund loan and lending facility repayment
By Devika Patel
Knoxville, Tenn., May 19 – MRC Global Inc. arranged a $363 million private placement of its 6.5% series A convertible perpetual preferred stock with an affiliate of Cornell Capital LLC on May 19, according to an 8-K filed Tuesday with the Securities and Exchange Commission.
The company will sell 363,000 preferreds at $1,000 per preferred. The preferreds each convert into 55.9284 common shares at an initial conversion price of $17.88 per share, which is a 10.58% premium to the May 18 closing share price of $16.17. The conversion price is also a 15.1% premium to the 20-day volume-weighted average price, the company noted in a press release.
Settlement is expected in the second quarter.
Proceeds will be used to pay down the company’s term loan and asset-based lending facility.
MRC is a Houston-based distributor of pipe, valve, fittings and related products and services to the energy industry.
| Issuer: | MRC Global Inc.
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| Issue: | Series A convertible perpetual preferred stock
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| Amount: | $363 million
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| Preferrreds: | 363,000
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| Price: | $1,000
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| Dividends: | 6.5%
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| Conversion price: | $17.88
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| Conversion premium: | 10.58%
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| Conversion ratio: | Into 55.9284 shares (per preferred)
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| Warrants: | No
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| Investor: | Cornell Capital LLC
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| Settlement date: | May 19
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| Stock symbol: | NYSE: MRC
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| Stock price: | $16.17 at close May 18
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| Market capitalization: | $1.58 billion
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