Photronics Announces Pricing of Convertible Senior Note Offering & Amends Revolving Credit Facility to Be Effective upon Clos...
March 23 2011 - 6:55AM
Business Wire
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in supplying
innovative imaging technology solutions for the global electronics
industry, today announced that it priced its placement of
$100,000,000 aggregate principal amount of 3.25% convertible senior
notes due 2016. Photronics has also granted the initial purchasers
an option to purchase up to an additional $15,000,000 aggregate
principal amount of convertible senior notes to cover
over-allotments. The convertible senior notes will pay interest
semi-annually at a rate of 3.25 % per annum and will mature on
April 1, 2016, unless earlier repurchased or converted. The
convertible senior notes are convertible into shares of Photronics
common stock at an initial conversion rate of 96.3879 shares of
common stock per $1,000 principal amount of convertible senior
notes, equivalent to an initial conversion price of approximately
$10.37 per share of common stock, subject to adjustment in certain
circumstances.
Photronics intends to acquire up to $30 million aggregate
principal amount of its outstanding 5.50% convertible senior notes
due 2014 in individually negotiated transactions, by delivering
cash and/or shares of its common stock as consideration. The
Company intends to repay up to $23 million of other outstanding
higher interest bearing debt. The Company intends to use the
remaining net proceeds to acquire from time to time additional 2014
notes in the open market and for general corporate purposes, which
may include, among other things, working capital and capital
expenditures.
In connection with the offering, Photronics has entered an
agreement to amend its senior revolving credit facility. The
amendment will, among other things: (i) reduce the aggregate
commitments of the lenders under the facility from $65 million to
$30 million; (ii) reduce the applicable interest rates and modify
the leverage ratios relating thereto; (iii) extend the maturity to
April 30, 2015, (iv) increase the "accordion" feature from $15
million to $20 million; (v) increase permitted purchase money
indebtedness from $30 million to $75 million; (vi) permit the
issuance of notes in this offering; (vii) increase the investments
"basket" from $15 million to $25 million; (viii) increase the
permitted amount of restricted payments from $5 million to $10
million; (ix) permit the repurchase and/or exchange of shares for
the 2014 notes; (x) permit the early repayment of certain
indebtedness; and (xi) remove the limitation on maximum last twelve
months capital expenditures. The amendment will become effective
upon closing of this offering.
The offering is expected to close on March 28, 2011, subject to
customary closing conditions.
The notes and the shares into which the notes will be
convertible have not been registered under the Securities Act of
1933, as amended, or applicable state securities laws, and will be
offered only to qualified institutional buyers in reliance on Rule
144A under the Securities Act. Unless so registered, the notes may
not be offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities Act
and applicable state securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the
notes or the common stock into which the notes will be convertible
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements made by or on behalf
of Photronics, Inc. and its subsidiaries (the Company). The
forward-looking statements contained in this press release involve
risks and uncertainties that may affect the Company's operations
and financial condition. These risks and uncertainties relate
principally to whether the offering will be consummated as
planned.
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