US in-flight broadband and content provider Global Eagle Entertainment has issued US$82.5m in convertible notes for possible acquisitions after an over-allotment option was tapped.
Initial purchasers took an extra US$7.5m on top of the private offering…
US in-flight broadband and content provider Global Eagle Entertainment has issued US$82.5m in convertible notes for possible acquisitions after an over-allotment option was tapped.
Initial purchasers took an extra US$7.5m on top of the private offering of US$75m of 2.75% senior notes, which mature in 2035 and priced at par.
The debt can be converted into cash, common stock, or a combination of the two at an initial rate of 53.9084 shares per US$1,000 of the notes. That represents a conversion price of roughly US$18.55 per share.
Concurrently with the bond issue, certain members of GEE’s board have sold 3,794,000 of the shares in a public offering at US$13.25 each. They had announced plans earlier this month to sell 8.3 million common shares.
Each shareholder participating in the offering was either a founder or an original investor of one of the units that combined in 2013 to form GEE, which will not receive any of the proceeds of the sale. The sellers will still hold a significant stake in the group, in aggregate, after the deal.
Meanwhile, GEE said it expects to receive about US$80.7m in net proceeds from the convertible notes offering.
“We intend to use the net proceeds from the offering of notes for working capital and general corporate purposes, including possible acquisitions, ongoing and future capital investments in new product development and technologies, and costs associated with expanding our customer base in new and emerging markets,” it said.
“However, we have no current commitments or obligations with respect to any acquisitions.”
Piper Jaffray & Co. and Macquarie Capital acted as joint book-running managers.
The shares were trading at about US$13.65 as SatelliteFinance went to press, after falling from US$15.70 on the last trading day before it announced the share sale and issue of convertibles.
