By Abigail W. Adams
Portland, Me., Jan. 17 – FAT Brands Inc. has priced $50 million in series A fixed-to-floating rate cumulative redeemable preferred stock at par of $100, according to a company release.
The preferred stock comes with a quarterly cash dividend of 8%, which will increase annually to 13%.
The preferred stock also carries an additional dividend of 5.6% that will cumulate for three years and will be payable on Dec. 31, 2020.
The preferred stock is being sold as part of a unit consisting of 100 shares of preferred stock and three-year warrants to purchase 185 shares of common stock. The company is offering 5,000 units at $10,000 each.
The warrants come with a strike price of $18 per share.
The series A preferred stock is callable at 110% of the liquidation preference in the first year, 105% of the liquidation preference in the second year and at par thereafter.
TriPoint Global Equities LLC is the sole bookrunner for the private offering.
The preferred was structured to appeal to income-oriented investors, according to the release.
The preferred stock will be quoted on the OTC within 90 days of the closing of the offering. The offering will close on a rolling basis starting on or about Jan. 31, according to the release.
Proceeds will be used to help finance the acquisition of Hurricane Grill & Wings, repay indebtedness and for general corporate purposes.
FAT Brands is a Los Angeles, Calif.-based multi-brand restaurant franchising company.
| Issuer: | FAT Brands Inc.
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| Issue: | Series A fixed-to-floating rate cumulative redeemable preferred stock and warrants
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| Amount: | $50 million, or 5,000 units made up of 100 shares of series A preferred stock and 185 warrants
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| Maturity: | Perpetual
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| Dividend: | Quarterly cash dividend of 8%, increasing annually to 13%, in addition to a cumulative dividend of 5.6% to be payable on Dec. 31, 2020
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| Price: | $10,000 per unit, par of $100 for preferreds
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| Warrants: | For 185 shares of common stock per unit
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| Warrant strike price: | $18.00
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| Warrant expiration: | Three years
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| Call: | Callable at 110% of par in first year, 105% of par in second year and at par thereafter
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| Bookrunner: | TriPoint Global Equities, LLC
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| Pricing date: | Jan. 17
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| Settlement: | Jan. 31
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| Distribution: | Private placement
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