DFC Global Corp. Closes Sale of $230 Million of Senior Convertible Notes
April 16 2012 - 11:42AM
Business Wire
DFC Global Corp. (NASDAQ: DLLR), a leading international
diversified financial services company serving primarily unbanked
and under-banked consumers for over 30 years, today announced that
it has consummated the sale of $230 million aggregate principal
amount of 3.25% senior convertible notes due 2017, which includes
the exercise in full of the initial purchasers’ overallotment
option.
The notes are unsecured, senior obligations of the Company and
will pay interest semi-annually at a rate of 3.25%. Prior to
October 15, 2016, the notes are convertible only upon the
occurrence of certain events and during certain periods, and
thereafter, at any time until the second scheduled trading day
immediately 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 initial conversion rate for the notes is 46.8962 shares of
common stock per $1,000 principal amount of the notes, which is
equal to a conversion price of approximately $21.32 per share,
representing a 29.0% conversion premium based on the closing price
of the Company’s common stock of $16.53 per share on April 10,
2012. The notes mature on April 15, 2017.
In connection with the offering of the notes, the Company
entered into convertible note hedge transactions in respect of its
common stock with affiliates of the initial purchasers of the notes
(the “option counterparties”). These convertible note hedge
transactions are intended to reduce the potential dilution upon
future conversion of the notes. In addition, the Company entered
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.
The net proceeds from this offering was approximately $222.0
million, after deducting the initial purchasers’ discounts and the
estimated offering expenses. The Company applied a portion of the
net proceeds from the offering and the sale of the warrants to fund
the costs and expenses of the convertible note hedge transactions,
and 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 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 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.
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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