Knight Capital Group (KCG) has been extended a $400 million
lifeline involving convertible bonds with a 2% coupon and a
conversion rate of $1.50 a share so that it can open its doors for
business Monday, CNBC reported, citing people familiar with the
deal.
The deal would help Knight remain open but is highly dilutive to
current shareholders, as reported by the Wall Street Journal
earlier Monday.
While the arrangement has yet to be announced, CNBC said it will
involve Jefferies Group Inc. (JEF) which is taking a $100 million
stake, Blackstone Group (BX) and General Atlantic LLC's Getco with
$87 million each, and also TD Ameritrade (AMTD) and Stifel
Nicolaus.
The conversion price of $1.50 a share is far below its closing
price Friday of about $4, and most will be converted within 10
days, CNBC said. The consortium is expected to own about 70% of
Knight after the deal is completed, the report said.
Outstanding shares in the company are seen rising to about 350
million from 98 million from before the trading glitch occurred
last Wednesday.
Full story at www.cnbc.com
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