Babcock & Wilcox Enterprises, Inc. (the “Company”)
(NYSE:BW) announced today that it commenced a rights offering
(“Rights Offering”) originally announced on March 1, 2018. Pursuant
to the Rights Offering, the Company is distributing to holders of
the Company’s common shares one nontransferable subscription right
(a “Right”) to purchase 1.4 common shares for each common share
held as of 5:00 p.m., New York City time, on March 15, 2018 (the
“Rights Distribution Record Date”) at a price of $3.00 per common
share (the “Subscription Price”). The Company will not issue
any fractional common shares in the Rights Offering and exercises
of Rights will be rounded down to the nearest whole common share.
In addition, the Company will not issue fractional Rights, or pay
cash in lieu of fractional Rights.
The Rights may be exercised at any time during the subscription
period, which will commence on March 19, 2018. The Rights will
expire if they are not exercised by 5:00 p.m., New York City time,
on April 10, 2018, unless the Company extends the Rights Offering
period.
The Company expects to issue 62,128,141 common shares in
connection with the Rights Offering, including any common shares
issued to Vintage Capital Management, LLC, a significant
shareholder of the Company (“Vintage”), as backstop purchaser.
The Company expects to mail subscription certificates evidencing
the Rights and a copy of the prospectus supplement for the Rights
Offering to shareholders as of the Rights Distribution Record Date
beginning on or about March 19, 2018.
The Company is conducting the Rights Offering to raise proceeds,
along with borrowings under its first lien revolving credit
facility, to repay in full all of the indebtedness outstanding and
the Company’s other obligations under its second lien term
loan.
The completion of the Rights Offering remains subject to the
satisfaction of certain conditions, and the Company reserves the
right to terminate the Rights Offering at any time prior to its
expiration date.
Neither the Company nor the Company’s Board of Directors has
made any recommendation as to whether shareholders should exercise
their Rights, although directors and executive officers may
exercise their Rights in their individual capacities. Shareholders
are urged to carefully review the subscription materials the
Company will provide and consult with their own legal and financial
advisors in deciding whether or not to exercise the Rights. The
Rights will be nontransferable. As such, shareholders will not be
able to sell their Rights if they do not wish to exercise them. In
addition, oversubscription Rights will not be available for
shareholders desiring to purchase additional Rights. As previously
disclosed, Vintage will serve as a backstop purchaser for the
Rights Offering and will be entitled to purchase any unsubscribed
common shares at the Subscription Price.
The Audit and Finance Committee of the Board of Directors of the
Company determined that the delay that would result from obtaining
shareholder approval prior to the completion of the Rights Offering
would seriously jeopardize the financial viability of the Company.
Because of that determination, the Audit and Finance Committee,
pursuant to an exception provided in the New York Stock Exchange’s
(the “NYSE”) shareholder approval policy for such a situation,
approved the transaction and the Company's reliance on the NYSE
financial viability exception. On March 19, 2018, the NYSE granted
the Company's request.
A registration statement relating to these securities has
been filed with the Securities and Exchange Commission (the "SEC")
and is effective. The information in this press release is not
complete and is subject to change. This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
the securities, nor shall there be any offer, solicitation or sale
of the securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful under the securities laws of
such state or jurisdiction. The Rights Offering will be made only
by means of a prospectus supplement, copies of which will be mailed
to all eligible record date shareholders and can be accessed
through the SEC’s website at www.sec.gov. A copy of
the prospectus supplement may also be obtained from the information
agent, D.F. King & Co., Inc., toll free at (800) 283-3192, or
email at bw@dfking.com. Additional information
regarding the rights offering is set forth in the Company’s
prospectus supplement filed with the SEC.
Forward-Looking Statements
B&W cautions that this release contains forward-looking
statements. You should not place undue reliance on these
statements. Statements that include the words "expect," "intend,"
"plan," "believe," "project," "forecast," "estimate," "may,"
"should," "anticipate" and similar statements of a future or
forward-looking nature identify forward-looking statements. These
forward-looking statements address matters that involve risks and
uncertainties and include statements that reflect the current views
of our senior management with respect to our financial performance
and future events with respect to our business and industry in
general. There are or will be important factors that could cause
our actual results to differ materially from those indicated in
these statements. If one or more events related to these or other
risks or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, actual results may differ
materially from what we anticipate. Differences between actual
results and any future performance suggested in our forward-looking
statements could result from a variety of factors, including the
following: our ability to continue as a going concern; our ability
to obtain and maintain sufficient financing to provide liquidity to
meet our business objectives, surety bonds, letters of credit and
similar financing, and to successfully complete our rights offering
and repay our second-lien term loan, or otherwise; the highly
competitive nature of our businesses; general economic and business
conditions, including changes in interest rates and currency
exchange rates; general developments in the industries in which we
are involved; cancellations of and adjustments to backlog and the
resulting impact from using backlog as an indicator of future
earnings; our ability to perform contracts on time and on budget,
in accordance with the schedules and terms established by the
applicable contracts with customers; failure by third-party
subcontractors or suppliers to perform their obligations on time
and as specified; our ability to realize anticipated savings and
operational benefits from our restructuring plans and other
cost-savings initiatives; our ability to successfully integrate and
realize the expected synergies from acquisitions; our ability to
successfully address productivity and schedule issues in our
Renewable segment; willingness of customers to waive liquidated
damages or agree to bonus opportunities; our ability to
successfully partner with third parties to win and execute
renewable projects; changes in our effective tax rate and tax
positions; our ability to maintain operational support for our
information systems against service outages and data corruption, as
well as protection against cyber-based network security breaches
and theft of data; our ability to protect our intellectual property
and renew licenses to use intellectual property of third parties;
our use of the percentage-of-completion method of accounting; the
risks associated with integrating businesses we acquire; our
ability to successfully manage research and development projects
and costs, including our efforts to successfully develop and
commercialize new technologies and products; the operating risks
normally incident to our lines of business, including professional
liability, product liability, warranty and other claims against us;
changes in, or our failure or inability to comply with, laws and
government regulations; difficulties we may encounter in obtaining
regulatory or other necessary permits or approvals; changes in, and
liabilities relating to, existing or future environmental
regulatory matters; our limited ability to influence and direct the
operations of our joint ventures; potential violations of the
Foreign Corrupt Practices Act; our ability to successfully compete
with current and future competitors; the loss of key personnel and
the continued availability of qualified personnel; our ability to
negotiate and maintain good relationships with labor unions;
changes in pension and medical expenses associated with our
retirement benefit programs; social, political, competitive and
economic situations in foreign countries where we do business or
seek new business; the possibilities of war, other armed conflicts
or terrorist attacks; and our ability to successfully consummate
strategic alternatives for our MEGTEC and Universal businesses if
we determine to pursue them.
If one or more of these risks or other risks materialize, actual
results may vary materially from those expressed. For a more
complete discussion of these and other risk factors, see B&W’s
filings with the SEC, including our most recent annual report on
Form 10-K. B&W cautions not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release, and undertakes no obligation to update or revise any
forward-looking statement, except to the extent required by
applicable law.
About B&W
Headquartered in Charlotte, N.C., Babcock & Wilcox is a
global leader in energy and environmental technologies and services
for the power and industrial markets. Follow us on Twitter
@BabcockWilcox and learn more at www.babcock.com.
# # #
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version on businesswire.com: https://www.businesswire.com/news/home/20180319005520/en/
Investors:Babcock & WilcoxChase Jacobson,
704-625-4944Vice President, Investor
Relationsinvestors@babcock.comorMedia:Babcock &
WilcoxRyan Cornell, 330-860-1345Public
Relationsrscornell@babcock.com
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