Great Elm Capital Corp. (“the Company” or “GECC”) (NASDAQ: GECC)
announced today that its Board of Directors has approved the terms
of a non-transferable subscription rights offering to purchase
shares of its common stock.
The Company will issue to its stockholders of record as of 5:00
p.m. New York City time, on September 4, 2020, non-transferable
rights to subscribe for up to an aggregate of 10,761,950 shares of
the Company’s common stock. Record date stockholders will receive
one right for each share of common stock owned on the record date.
The rights entitle the holders to purchase at the subscription
price one new share of common stock for every one right held, and
record date stockholders who fully exercise their rights will be
entitled to subscribe, subject to certain limitations set forth in
the prospectus and subject to allotment, for additional shares of
common stock that were not subscribed for by other holders of
record. Stockholders may exercise their rights at any time
during the subscription period, which commences on September 8,
2020 and ends at 5:00 p.m., New York City time, on September 28,
2020, unless extended by the Company in its sole discretion (the
“Expiration Date”).
The Company intends to use the net proceeds from the offering
primarily to (i) make opportunistic investments, in accordance with
its investment objectives and policies, in assets that the
Company’s external investment manager, Great Elm Capital
Management, Inc., believes have become undervalued due to the
current extreme market volatility, and on more attractive terms
than the Company would otherwise be able to obtain under typical,
less volatile market conditions and (ii) support its existing
portfolio companies through the COVID-19 pandemic.
“This offering will allow us to continue implementing the
portfolio repositioning we began in the second quarter, including
by pursuing additional opportunities in the specialty finance
sector,” remarked Peter A. Reed, GECC’s Chief Executive Officer.
“These opportunities, which may offer more attractive returns than
can be found in syndicated corporate credit, also help to make our
portfolio more proprietary. We remain intently focused on
creating stockholder value by diversifying our portfolio,
maintaining significant liquidity and further strengthening our
balance sheet.”
The rights are non-transferable and will not be listed for
trading on the Nasdaq Global Market or any other stock exchange.
The rights may not be purchased or sold, and there will not be any
market for trading the rights. The shares of the Company’s common
stock to be issued pursuant to the offering will be listed for
trading on the Nasdaq Global Market under the symbol “GECC.”
Great Elm Capital Group, Inc. and certain of the Company’s other
stockholders (the “Participating Shareholders”) have indicated that
they intend to fully exercise their rights and over-subscribe in
order to make an aggregate investment of up to $24 million in
shares of the Company’s common stock. Any over-subscription by the
Participating Shareholders will be effected only after pro rata
allocation of over-subscription shares to record date holders
(other than the Participating Shareholders) who fully exercise all
rights issued to them. Accordingly, there can be no assurance that
the Participating Shareholders will acquire any shares of the
Company’s common stock through their exercise of over-subscription
privileges.
The subscription price for the shares of common stock to be
issued pursuant to the offering will be 85% of the volume-weighted
average of the market price of the Company’s shares of common stock
on the Nasdaq Global Market for the five consecutive trading days
ending on the Expiration Date. Because the subscription price will
be determined on the Expiration Date, rights holders who decide to
acquire shares of common stock pursuant to their primary
subscription rights or pursuant to the over-subscription privilege
will generally not know the actual subscription price at the time
of exercise. Rights holders who decide to acquire shares will be
required initially to pay for the shares subscribed for at the
estimated subscription price disclosed in the prospectus (and may
be required to pay an additional amount or receive a partial
refund, depending on the final subscription price).
Important Dates to Remember
Record Date |
|
September 4, 2020 at 5:00 p.m.
New York City time |
Subscription Period |
|
From September 8, 2020 to
September 28, 2020 (unless the offering is extended) |
Expiration Date |
|
September 28, 2020 (unless the
offering is extended) |
Deadline for Delivery of
Subscription Certificates and Payment for Shares |
|
September 28, 2020 at 5:00
p.m. New York City time (unless the offering is extended) |
Imperial Capital, LLC and Piper Sandler &
Co. are acting as dealer managers for the offering.
About Great Elm Capital Corp.
Great Elm Capital Corp. is an externally managed, specialty
finance company focused on investing in debt instruments of middle
market companies. GECC elected to be regulated as a business
development company under the Investment Company Act of 1940, as
amended. GECC targets catalyst-driven investments as it seeks to
generate attractive, risk-adjusted returns through both current
income and capital appreciation.
Investors are advised to carefully consider the
investment objectives, risks and charges and expenses of GECC
before investing. The prospectus contains this and other
important information you should know before investing in the
common stock. Please read it and other documents referred to
therein carefully in their entirety before you invest. A copy
of the prospectus may be obtained by contacting Imperial Capital,
LLC, Attention: Prospectus Department, 10100 Santa Monica Blvd.,
Suite 2400, Los Angeles, CA 90067 or by phone: 310-246-3700 or
Piper Sandler & Co., Attention: Prospectus Department, 800
Nicollet Mall, J12S03, Minneapolis, MN 55402, by email at
prospectus@psc.com or by phone: 1-800-747-3924.
GECC files annual, quarterly and current reports, proxy
statements and other information about GECC with the Securities and
Exchange Commission (“SEC”). You may also obtain free copies
of GECC’s annual and quarterly reports and make stockholder
inquiries by contacting Great Elm Capital Corp., 800 South Street,
Suite 230, Waltham, Massachusetts 02453 or by calling GECC collect
at (617) 375-3006. GECC maintains a website at
http://greatelmcc.com and makes all of its annual, quarterly and
current reports, proxy statements and other publicly filed
information available, free of charge, on or through such
website. Information on GECC’s website is not incorporated or
a part of the prospectus. The SEC also maintains a website at
http://www.sec.gov where such information is available without
charge.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this communication that are not historical facts
are “forward-looking” statements within the meaning of the federal
securities laws. These statements are often, but not always, made
through the use of words or phrases such as “expect,” “anticipate,”
“should,” “will,” “estimate,” “designed,” “seek,” “continue,”
“upside,” “potential” and similar expressions. All such
forward-looking statements involve estimates and assumptions that
are subject to risks, uncertainties and other factors that could
cause actual results to differ materially from the results
expressed in the statements. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking statements are: conditions in the credit markets,
the price of GECC common stock, the performance of GECC’s portfolio
and investment manager and risks associated with the economic
impact of the COVID-19 pandemic on GECC and its portfolio
companies. Information concerning these and other factors can be
found in GECC’s Annual Report on Form 10-K, GECC’s Quarterly
Reports on Form 10-Q and other reports filed with the SEC. GECC
assumes no obligation to, and expressly disclaims any duty to,
update any forward-looking statements contained in this
communication or to conform prior statements to actual results or
revised expectations except as required by law. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
Media & Investor Contact:
Investor Relations+1 (617)
375-3006investorrelations@greatelmcap.com
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