ViaSat has launched a fully underwritten share offering of 5.5 million shares. Of the shares on offer, ViaSat is to issue 2.5 million new shares while certain existing shareholders are selling 3 million of the shares that they received as part of…
ViaSat has launched a fully underwritten share offering of 5.5 million shares. Of the shares on offer, ViaSat is to issue 2.5 million new shares while certain existing shareholders are selling 3 million of the shares that they received as part of ViaSat’s US$568m acquisition of WildBlue last year.
Based on the company’s closing share price of US$34.61 as of March 22, the date when it was announced, the total offer would raise approximately US$190.36m, with ViaSat raising US$86.53m and the selling shareholders US$103.83m.
BofA Merrill Lynch, Credit Suisse and Morgan Stanley are joint book-running managers and underwriters for the offering, while Barclays Capital and Needham & Company are co-managers and underwriters. The underwriters have a 30-day overallotment option to purchase an additional 825,000 shares, 375,000 in new shares and 450,000 existing shares.
Of the former WildBlue stockholders who are cutting their stakes in ViaSat, Liberty Satellite LLC has largest. The subsidiary of media giant Liberty is to sell approximately 1.466 million (or 1.686 million assuming the overallotment is exercised) of its total 1.82 million shares in ViaSat, while Intelsat USA Sales Corp. is to sell 514,317 shares (591,464 including overallotment) of its 638,788 ViaSat shares, having already sold 251,731 back to ViaSat on January 4. Other selling shareholders include the National Rural Telecommunications Cooperative, which will sell up to 412,274 of its 445,260 shares, and Tennenbaum Capital Partners, which is selling up to 760,317 of its 821,151 shares via a number of its funds. If the overallotment is exercised, then in total the former WildBlue investors will have reduced their collective stake in ViaSat from 10.2% to 1.9%.
ViaSat stated that it will use the net proceeds from the new share issue portion of the transaction for general corporate purposes, including potentially for financing costs related to the purchase, launch and operation of its ViaSat-1 satellite. The company added that it may use all or a portion of the net proceeds to repay outstanding borrowings under its revolving credit facility.
ViaSat is currently in discussions with the lenders under this facility to increase its size from US$210m to US$275m. It has also recently made a number of amendments to the covenants on the facility, including increasing the aggregate amount of letters of credit that may be issued from US$25m to US$35m, potentially increasing the revolving loan commitment under the facility to up to US$90m and increasing the basket for permitted indebtedness for capital lease obligations from US$10m to US$50m.
As of January 1, ViaSat’s total indebtedness was US$428m, comprising US$140m of outstanding borrowings under the credit facility, US$13m outstanding under standby letters of credit and US$275m in outstanding of 8.875% seven-year senior notes.
