DFC Global Corp. Announces Proposed Private Offering of $200 Million of Senior Convertible Notes
April 09 2012 - 4:01PM
Business Wire
(NASDAQ:DLLR — News) DFC Global Corp., a leading international
diversified financial services company serving primarily unbanked
and under-banked consumers for over 30 years, today announced that
it intends to offer, subject to market conditions and other
factors, up to $200 million aggregate principal amount of senior
convertible notes due 2017 in a private offering. The notes will be
offered only to qualified institutional buyers in reliance on Rule
144A under the Securities Act of 1933. The Company also intends to
grant the initial purchasers an option to purchase up to an
additional $30 million aggregate principal amount of notes.
The notes will be unsecured, senior obligations of the Company
and will pay interest semi-annually. Prior to October 15, 2016, the
notes will be convertible only upon the occurrence of certain
events and during certain periods, and thereafter, at any time
until the second scheduled trading day preceding the maturity date.
Upon conversion, holders will receive cash up to the principal
amount and shares of the Company’s common stock in respect of any
excess conversion amount. The interest rate, conversion rate and
other terms will be determined by negotiations between the Company
and the initial purchasers of the notes.
In connection with the offering, the Company expects to enter
into convertible note hedge transactions in respect of its common
stock with one or more affiliates of the initial purchasers of the
notes (the “option counterparties”). These convertible note hedge
transactions are expected to reduce the potential dilution upon
future conversion of the notes. In addition, the Company expects to
enter into separate warrant transactions with the option
counterparties at a higher strike price. The warrant transactions
could separately have a dilutive effect to the extent that the
market value per share of the Company’s common stock exceeds the
applicable strike price of the warrants. If the initial purchasers
exercise their option to purchase additional notes, the Company
expects to enter into additional convertible note hedge and warrant
transactions with the option counterparties.
The Company intends to apply a portion of the net proceeds from
the sale of the notes and the proceeds from the warrant
transactions to fund the cost of the convertible note hedge
transactions entered into between the Company and the option
counterparties. The Company expects to apply the remaining net
proceeds to repay certain indebtedness and for other general
corporate purposes, which may include acquisitions, investments and
repurchases of Company common stock from time to time pursuant to
the Company’s previously announced share repurchase program.
The Company has been advised that, in connection with
establishing their initial hedge of the convertible note hedge and
warrant transactions, the option counterparties and/or their
affiliates expect to purchase shares of the Company’s common stock
in open market transactions and/or privately negotiated
transactions and/or enter into various over-the-counter derivative
transactions with respect to shares of the Company’s common stock
in each case, concurrently, with, or shortly after, the pricing of
the notes. In addition, the option counterparties and/or their
affiliates may modify their hedge positions by unwinding these
derivative transactions, entering into or unwinding additional
over-the-counter derivative transactions with respect to the
Company’s common stock and/or purchasing or selling shares of the
Company’s common stock or other of the Company’s securities in
secondary market transactions from time to time following the
pricing of the notes and prior to the maturity of the notes (and
are likely to do so during any conversion period related to a
conversion of notes). Any of these hedging activities could have
the effect of increasing, decreasing or preventing a decline in the
price of the Company’s common stock or the notes at that time.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the notes or the shares of common
stock issuable upon conversion of the notes, nor shall there be any
sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or jurisdiction.
The notes and any shares of common stock of the Company that may
be issued upon conversion of the notes have not been registered
under the Securities Act or any state securities laws, and unless
so registered, 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 laws. This press release
is issued pursuant to Rule 135c under the Securities Act and shall
not constitute an offer to sell or the solicitation of an offer to
buy any of these securities, nor shall it constitute an offer,
solicitation or sale in any jurisdiction in which such offer,
solicitation or sale is unlawful.
About DFC Global Corp.
DFC Global Corp. is a leading international diversified
financial services company serving primarily unbanked and
under-banked consumers who, for reasons of convenience and
accessibility, purchase some or all of their financial services
from the Company rather than from banks and other financial
institutions.
Forward-Looking Statement
This news release contains forward-looking statements, including
statements regarding the following: the offering of the notes, the
entry into the convertible note hedge transactions, the entry into
the warrant transactions, the impact of the convertible note hedge
transactions and the warrant transactions and the utility of the
convertible note hedge transactions and the warrant transactions.
These forward-looking statements involve risks and uncertainties,
including risks related to the regulatory environment, current and
potential future litigation, the integration of acquired stores,
the performance of new stores, the implementation and results of
restructuring initiatives, the impact of the note offering, the
convertible note hedge transactions and the warrant transactions
and the effects of new products and services on the Company’s
business, results of operations, financial condition, prospects and
guidance. There can be no assurance that the Company will attain
its expected results, successfully integrate any of its
acquisitions, attain its published guidance metrics, or that
ongoing and potential future litigation, the increase in interest
payments under the notes, or the various FDIC, Federal, state or
foreign legislative or regulatory activities affecting the Company
or the banks with which the Company does business will not
negatively impact the Company’s operations. A more complete
description of these and other risks, uncertainties and assumptions
is included in the Company’s filings with the Securities and
Exchange Commission, including those described under the heading
“Risk Factors” attached as an exhibit to the Company’s Current
Report on Form 8-K filed with the Securities and Exchange
Commission on April 9, 2012 and its Annual Report on Form 10-K for
the Company’s fiscal year ended June 30, 2011. You should not place
any undue reliance on any forward-looking statements. We disclaim
any obligation to update any such factors or to publicly announce
results of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
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