Emcore exchanges $146 million of 5% convertibles

New York, Feb. 19 - Emcore Corp. said it exchanged $146 million of its existing 5% convertible senior notes due May 15, 2006 for new convertibles and stock.

The Somerset, N.J.-based company will issue $80.3 million of new 5% convertible senior notes due May 15, 2011 and 7.7 million shares of common stock for the existing convertibles.

The maker of compound semiconductor-based products said the transaction is intended to cut debt by $65.7 million and reduce its annual interest expense by $3.3 million.

The convertibles represent 90.2% of the aggregate principal amount outstanding.

The exchange is expected to close on or around Feb. 24.

CIBC World Markets is the dealer manager for the transaction.

As previously announced, Emcore was offering to exchange existing convertibles for up to $88.96 million of new 5% convertible senior subordinated notes and $56.62 million of common stock up to 10.54 million shares.

For each $1,000 principal amount of existing convertibles tendered, holders will receive $550 principal amount of the new convertibles and $350 in Emcore stock. If the company's stock price is below $5.37 per share, holders will receive 65.18 shares. Emcore stock closed at $6.49 on Wednesday.

The new notes will have a conversion price of $8.06 per share. The existing notes convert at $48.76.

© 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.