Gevo Exchanges Convertible Senior Secured Notes Maturity Date for New Notes is December 31, 2020/April 1, 2021
January 13 2020 - 9:00AM
Gevo, Inc. (NASDAQ: GEVO) (the
“Company”) announced today that Wbox 2019-3 Ltd.
(“Whitebox”), as the holder of the Company’s issued and outstanding
12.0% Convertible Senior Secured Notes due March 15, 2020 (the
“2020 Notes”), and the Company have entered into an Exchange and
Purchase Agreement (the “Purchase Agreement”) pursuant to which
Whitebox has exchanged (the “Exchange”) all outstanding amounts
under the existing 2020 Notes for approximately $14.4 million of
the Company’s newly created 12.0% Convertible Senior Secured Notes
due 2020/2021 (the “New Notes”). The New Notes are convertible into
the Company’s common stock. The Exchange and the issuance of the
New Notes occurred on January 10, 2020.
“This Exchange is a significant milestone for Gevo. With the
extension of the maturity date for our senior debt, Gevo can focus
on securing more 'take or pay' offtake agreements and arranging
financing to build out its biogas business and construct the larger
production facilities that Gevo will need to produce the renewable
transportation fuels for those offtake agreements,” said Dr.
Patrick R. Gruber, Gevo’s Chief Executive Officer.
The key terms of the New Notes are as follows:
- Principal Amount: Approximately $14.4
million after giving effect to original issue discount.
- Maturity Date: The New Notes will mature (the
“Maturity Date”) on December 31, 2020, provided that the Maturity
Date shall automatically be extended to April 1, 2021, if and only
if, (i) Stockholder Approval (as defined below) has been timely
obtained, and (ii) the principal balance of the New Notes
(including New Notes that may be issued pursuant to the Holder
Option described below) is less than $7 million by December 15,
2020. Upon the Maturity Date, the outstanding principal amount of
the New Notes and any accrued interest shall be payable in
cash.
- Original Issue Discount: Two percent (2%)
original issue discount. As of January 10, 2020, an aggregate
$14,099,712 of principal and unpaid accrued interest was
outstanding under the 2020 Notes.
- Interest: The New Notes accrue interest at 12%
per annum, with 8% payable in cash and 4% payable as Payment in
Kind (“PIK”) interest. The PIK interest is paid by increasing the
principal amount of the New Notes by the amount of PIK interest
due.
- Whitebox Conversion and Conversion Price:
Subject to the terms and conditions of the indenture governing the
New Notes (the “New Indenture”), the New Notes are convertible, at
the option of the holders, into shares of the Company’s common
stock. The New Notes have an initial conversion price (the
“Conversion Price”) equal to $2.4420 per share. The Conversion
Price is subject to adjustment as provided in the New
Indenture.
- Additional Contractual Amortization
Conversion: By mutual agreement, the parties may,
from time to time, agree to convert (a “Contractual Amortization
Conversion”) the New Notes into common stock of the Company at a
conversion price equal to the lesser of (i) the then Conversion
Price or (ii) a 10% discount to the average Daily Volume-Weighted
Average Price (“VWAP”) for the three forward trading days prior to
the conversion, and the amount of the New Notes to be converted
will be determined at the end of such VWAP period, with the shares
to be delivered one trading day thereafter.
- Redemption: The Company is permitted to
redeem the New Notes in whole or part (in an amount that shall
equal or exceed $1,000,000) in cash at any time after obtaining the
Stockholder Approval and upon 120 days prior written notice.
Following a notice of redemption of the New Notes by the Company,
the holders may elect to convert the New Notes into shares of
Common Stock at the same conversion price as applicable to a
Contractual Amortization Conversion.
- Holder Option: Whitebox has an option, subject
to certain conditions, to purchase up to an additional $7.14
million aggregate principal amount of New Notes at a price equal to
the original principal amount of the New Notes so purchased less an
original issue discount of 2%. This option may be exercised in
whole or in part, on one or more occasions, until the later of (x)
one hundred eighty (180) days from January 10, 2020 and (y) 30 days
after the Stockholder Approval is obtained.
- Make Whole Payments: For redemptions by
the Company, Fundamental Changes (as the term is defined in the New
Indenture), conversions initiated by the holders following receipt
of a notice of redemption by the Company and acceleration of the
New Notes following an event of default, an amount equal to
fourteen percent (14%) of the principal amount of the New Notes
redeemed or accelerated, regardless of the time left until
maturity, shall be paid by the Company to the holders. For
conversions initiated by the holders (other than those described
above) and Contractual Amortization Conversions, an amount
initially equal to fourteen percent (14%) of the principal amount
of the New Notes converted, regardless of the time left until
maturity, shall be paid by the Company to the holders; such amount
decreases by 0.75% every month after the sixth month of the term of
the New Notes (i.e., Month 7=13.25%, Month 8=12.50%, Month
9=11.75%, etc., until maturity of the New Notes).
The Company may not issue under the New Indenture (whether upon
conversion of the New Notes or otherwise) additional shares of its
common stock in excess of 19.99% of the Company’s common stock
outstanding on the date of the New Indenture (January 10, 2020);
this restriction is subject to removal upon approval by
stockholders of the Company (the “Stockholder Approval”).
A Current Report on Form 8-K will be filed today with the U.S.
Securities and Exchange Commission that will contain a more
detailed description of the terms of the New Indenture, the
Purchase Agreement, the Exchange and the New Notes and will include
a copy of the Purchase Agreement and the New Indenture.
About Gevo
Gevo is commercializing the next generation of gasoline, jet
fuel and diesel fuel with the potential to achieve zero carbon
emissions, addressing the market need of reducing greenhouse gas
emissions with sustainable alternatives. Gevo uses low-carbon
renewable resource-based carbohydrates as raw materials and is in
an advanced state of developing renewable electricity and renewable
natural gas for use in production processes, resulting in
low-carbon fuels with substantially reduced carbon intensity (the
level of greenhouse gas emissions compared to standard petroleum
fossil-based fuels across their lifecycle). Gevo’s products perform
as well or better than traditional fossil-based fuels in
infrastructure and engines, but with substantially reduced
greenhouse gas emissions. In addition to addressing the problems of
fuels, Gevo’s technology also enables certain plastics, such as
polyester, to be made with more sustainable ingredients. Gevo’s
ability to penetrate the growing low-carbon fuels market depends on
the price of oil and the value of abating carbon emissions that
would otherwise increase greenhouse gas emissions. Gevo believes
that its proven, patented technology enabling the use of a variety
of low-carbon sustainable feedstocks to produce price-competitive
low carbon products such as gasoline components, jet fuel, and
diesel fuel yields the potential to generate project and corporate
returns that justify the build-out of a multi-billion-dollar
business. Learn more at www.gevo.com.
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which include statements relating to the Exchange, the
Purchase Agreement, the New Notes, the Stockholder Approval,
including whether Gevo’s stockholders will approve the Exchange and
the transactions contemplated by the Purchase Agreement will be
completed, are made on the basis of the current beliefs,
expectations and assumptions of the management of Gevo and are
subject to significant risks and uncertainty. Investors are
cautioned not to place undue reliance on any such forward-looking
statements. All such forward-looking statements speak only as of
the date they are made, and Gevo undertakes no obligation to update
or revise these statements, whether as a result of new information,
future events or otherwise. Although Gevo believes that the
expectations reflected in these forward-looking statements are
reasonable, these statements involve many risks and uncertainties
that may cause actual results to differ materially from what may be
expressed or implied in these forward-looking statements. For a
further discussion of risks and uncertainties that could cause
actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to the
business of Gevo in general, see the risk disclosures in the Annual
Report on Form 10-K of Gevo for the year ended December 31, 2018,
and in subsequent reports on Forms 10-Q and 8-K and other filings
made with the U.S. Securities and Exchange Commission by Gevo.
Investor and Media ContactShawn M.
SeversonIntegra Investor Relations+1
415-226-7747info@integra-ir.com 63608190 v2
Gevo (NASDAQ:GEVO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gevo (NASDAQ:GEVO)
Historical Stock Chart
From Apr 2023 to Apr 2024