By Kenneth Lim
Boston, Nov. 29 - Transmeridian Exploration Inc. on Tuesday priced an upsized $44 million of convertible senior preferred stock at a dividend of 15% and an initial conversion premium of 39%.
The deal amount includes $7 million sold in a separate private placement to the company's chief executive, chief financial officer and two other existing shareholders. The total size of the offering was originally $42 million, including the private placement.
The preferreds were offered at par of $100 apiece. Price talk was not disclosed, and syndicate sources declined to comment, citing the confidentiality of the private deal.
Jefferies and Co. was the bookrunner of the Rule 144A offering.
The preferred stock has an initial conversion price of $4.50 per common share. If the company fails to meet certain production rates or common stock trading thresholds by June 30, 2007, the dividend rate will be raised to 18% and the conversion price lowered to $3.90 per common share.
The preferred shares will be automatically converted in tranches comprising one-third of the entire series for every 30-day period after July 1, 2007 in which Transmeridian common stock exceeds 150% of the conversion price for 20 days.
The preferred stock will be non-callable before Oct. 1, 2007. Between then and Dec. 31, 2007, the preferreds may be called subject to an undisclosed hurdle. The preferreds are freely callable after that. The convertibles may be put on the fifth year.
Transmeridian, a Houston-based owner and developer of oil reserves in the Caspian Sea region, said it plans to use the proceeds of the deals to fund the development of its South Alibek field and for working capital and general purposes.
| Issuer: | Transmeridian Exploration Inc.
|
| Issue: | Convertible senior preferred stock
|
| Bookrunner: | Jefferies and Co.
|
| Amount: | $44 million, including a $7 million private placement
|
| Greenshoe: | None
|
| Maturity: | Perpetual
|
| Dividend: | 15%
|
| Price: | Par of $100
|
| Yield: | 15%
|
| Conversion premium: | 39%
|
| Conversion price: | $4.50
|
| Conversion ratio: | 22.2222
|
| Automatic conversion: | 150%
|
| Call protection: | Non-callable before Oct. 1, 2007; callable subject to hurdle between Oct. 1, 2007 and Dec. 31, 2007; freely callable thereafter
|
| Puts: | Dec. 1, 2011
|
| Pricing date: | Nov. 28, after the close
|
| Settlement date: | Dec. 1
|
| Distribution: | Rule 144A
|
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