Hutchinson Technology Announces Notes Repurchase and Private Placement Financing
January 23 2013 - 4:01PM
Hutchinson Technology Incorporated (Nasdaq:HTCH) announced today
that it completed the repurchase of $18,682,000 aggregate principal
amount of its outstanding 8.50% Convertible Senior Notes due 2026
(the "8.50% Convertible Notes") from certain holders for cash
totaling $11,582,840, plus accrued and unpaid interest. The
repurchased 8.50% Convertible Notes are being retired, and a total
of $39,822,000 aggregate principal amount of 8.50% Convertible
Notes remain outstanding.
The repurchase was financed through a private placement
completed January 22, 2013, with an accredited institutional
investor for the sale of $12,200,000 aggregate principal amount of
10.875% Senior Secured Second Lien Notes due 2017 (the "10.875%
Notes"). The company received cash proceeds of $11,590,000 from the
private placement, all of which were used to fund the repurchase of
the 8.50% Convertible Notes.
David Radloff, Hutchinson Technology's chief financial officer,
said the refinancing improves the company's financial position by
extending the maturity on a portion of its debt and reducing its
overall debt balance by $6,482,000 while maintaining its cash
levels.
The 10.875% Notes bear interest at a rate of 10.875% per annum,
payable semiannually in arrears on January 15 and July 15 of each
year, beginning July 15, 2013, and mature on January 15, 2017,
unless redeemed or repurchased in accordance with their terms. The
10.875% Notes are secured by liens on substantially all of the
personal and real property of the company, which liens rank equally
and ratably with liens securing the company's outstanding 8.50%
Senior Secured Second Lien Notes due 2017 (the "8.50% Secured
Notes") and junior in priority to any liens securing the company's
existing or future senior secured credit facilities (other than
certain excluded assets).
In connection with the closing of the private placement,
amendments to the company's existing senior secured credit facility
agreement and the company's indenture governing its 8.50% Secured
Notes became effective. The terms of the credit facility and
indenture were amended to, among other things, permit the
incurrence of the debt represented by the 10.875% Notes, the
granting of the second priority liens to secure the 10.875% Notes
and the repurchase of the 8.50% Convertible Notes.
The definitive agreements containing details for the 8.50%
Convertible Notes repurchase, the private placement financing and
the amendments to the company's existing senior secured credit
facility agreement and the indenture governing its 8.50% Secured
Notes will be filed as exhibits to a Current Report on Form 8-K
that will be filed with the Securities and Exchange Commission.
The 10.875% Notes have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or any state
securities laws, and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any security, nor will there be an
offer, solicitation or sale in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful.
About Hutchinson Technology
Hutchinson Technology is a global technology leader committed to
creating value by developing solutions to critical customer
problems. The company's Disk Drive Components Division is a key
worldwide supplier of suspension assemblies for disk drives. The
company's BioMeasurement Division is focused on bringing new
technologies and products to the market that provide information
clinicians can use to improve the quality of health care and reduce
costs.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains forward-looking statements. The
company does not undertake to update its forward-looking
statements. The reader is cautioned not to rely on these
forward-looking statements. These statements are subject to risks,
uncertainties and other factors that are described from time to
time in the company's reports filed with the Securities and
Exchange Commission, many of which are outside of the company's
control and which could have a material adverse effect on the
company and cause actual results to differ materially from those
anticipated in these forward-looking statements. Therefore, the
reader should consider these risks and other factors with caution
and form a critical and independent conclusion about their likely
effect on the company's actual results. All forward-looking
statements attributable to the company or persons acting on the
company's behalf are expressly qualified in their entirety by the
cautionary statements set forth herein.
CONTACT: INVESTOR CONTACT:
Chuck Ives
Hutchinson Technology Inc.
320-587-1605
MEDIA CONTACT:
Connie Pautz
Hutchinson Technology Inc.
320-587-1823
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