HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a
diversified holding company, announced today that it has commenced
its previously announced $65 million common stock rights offering.
All HC2 stockholders will have the opportunity
to participate in the offering and subscribe for their basic
subscription amount of newly issued shares of common stock in
proportion to their respective existing ownership amounts. HC2
stockholders who exercise their respective full basic subscription
rights will have over-subscription privileges giving such HC2
stockholders the option to subscribe for any shares of common stock
that remain unsubscribed at the expiration of the rights offering.
If the aggregate subscriptions (basic subscriptions plus
over-subscriptions) exceed the amount offered in the rights
offering, then the aggregate over-subscription amount will be
pro-rated among the stockholders exercising their respective
over-subscription privileges based on the basic subscription
amounts of such stockholders.
The Company is distributing to each holder of
the Company’s common stock as of 5:00 p.m., New York City time,
October 2, 2020 (the “rights offering record date”), one
transferable subscription right to purchase 0.5462 shares of the
Company’s common stock at a price of $2.27 per whole share for each
share of the Company’s common stock held as of the rights offering
record date. Holders of the Company’s existing preferred stock that
are entitled to participate in dividend distributions to holders of
the Company’s common stock are also entitled to participate in the
rights offering. The Company will not issue fractional rights or
cash in lieu of fractional rights. Fractional rights will be
rounded to the nearest whole number with such adjustments as may be
necessary to ensure that if all rights are exercised, the Company
will receive gross proceeds of approximately $65 million. The
Company will also not issue fractional shares of its common stock.
Any fractional shares of the Company’s common stock created by the
exercise of the rights will be rounded down to the nearest whole
share, and any excess payments in respect thereof will be
returned.
The rights offering will be partially
backstopped by Lancer Capital LLC (“Lancer Capital”), an
investment fund led by Avram Glazer, the Chairman of the Board and
the Company’s largest stockholder. Lancer Capital has agreed to
exercise and purchase its basic subscription amount and will
participate in the oversubscription privileges as described above
for a total of up to $35 million (inclusive of the basic
subscription amount). Lancer Capital’s backstop commitment will be
effected in the manner set forth in the Investment Agreement
entered into with the Company, a copy of which has been filed by
the Company with the SEC.
HC2 expects to use the proceeds from the rights
offering for general corporate purposes, including debt service and
for working capital.
Consummation of the rights offering is
conditioned upon stockholder approval of an increase to the number
of authorized shares of the Company’s common stock (the “Authorized
Shares Proposal”), which condition may be waived in whole or in
part by the Company.
The Rights Offering will expire at 5:00 p.m.,
New York City time, on November 20, 2020, unless extended by the
Company. The Company may extend the expiration date if stockholder
approval of the Authorized Shares Proposal is not obtained on or
prior to the previously scheduled expiration date. The Company
reserves the right to amend or terminate the rights offering at any
time prior to its expiration date.
The shares of common stock to be issued upon
exercise of the rights, like the Company’s existing shares of
common stock, will be listed for trading on the New York Stock
Exchange (the “NYSE”) under the symbol “HCHC.” Although the rights
will be transferrable, the Company does not intend to list the
rights on the NYSE or any other national securities exchange.
The Company expects that the information agent
for the rights offering will mail rights certificates and a copy of
the prospectus and prospectus supplement for the rights offering to
stockholders as of the rights offering record date beginning on or
about October 7, 2020. Holders of shares of common stock in “street
name” through a brokerage account, bank or other nominee will not
receive physical rights certificates and must instruct their
broker, bank or nominee whether to exercise subscription rights on
their behalf. For any questions or further information about the
rights offering, please call Okapi Partners LLC, the information
agent for the rights offering, at (855) 208-8902 (tollfree).
Neither the Company nor its Board of Directors
has, or will, make any recommendation to stockholders regarding the
exercise or sale of rights in the rights offering. Stockholders
should make an independent investment decision about whether or not
to exercise or sell their rights based on their own assessment of
the Company’s business and the rights offering.
The rights offering
will be made pursuant to HC2’s effective
shelf registration statement on Form S-3, filed with the SEC
on September 9,
2020, and a prospectus supplement containing the
detailed terms of the rights offering to
be filed with the SEC on
October 7,
2020. The information in this
press release is not complete and is subject to change. This press
release shall not constitute an offer to sell or a solicitation of
an offer to buy the securities, nor shall there be any offer,
solicitation or sale of the securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful under
the securities laws of such state or jurisdiction. The rights
offering will be made only by
means of a prospectus and a related prospectus
supplement, copies of
which will be
distributed to all eligible
stockholders as of the rights offering
record date on or about October
7, 2020 and may also be
obtained free of charge at the website maintained by the SEC at
www.sec.gov or by contacting the information agent for the rights
offering.
About HC2
HC2 Holdings, Inc. is a publicly traded
(NYSE:HCHC) diversified holding company, which seeks opportunities
to acquire and grow businesses that can generate long-term
sustainable free cash flow and attractive returns in order to
maximize value for all stakeholders. HC2 has a diverse array of
operating subsidiaries across multiple reportable segments,
including Construction, Energy, Telecommunications, Life Sciences,
Broadcasting, Insurance and Other. HC2’s largest operating
subsidiary is DBM Global Inc., a family of companies providing
fully integrated structural and steel construction services.
Founded in 1994, HC2 is headquartered in New York, New York.
Cautionary Statement Regarding
Forward-Looking Statements
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995: This press release
contains, and certain oral statements made by our representatives
from time to time may contain, forward-looking statements regarding
the proposed rights offering, including, among others, statements
related to the expected timing, eligible offerees, backstop
purchaser and expectations regarding participation in the rights
offering, the use of proceeds from the rights offering, the size of
the rights offering and other terms of the rights offering, all of
which involve risks, assumptions and uncertainties, many of which
are outside of the Company’s control, and are subject to change.
The consummation of the rights offering is also subject to certain
conditions, including stockholder approval of the Authorized Shares
Proposal and market conditions. Accordingly, no assurance can be
given that the rights offering will be consummated on the terms
described above or at all. All forward-looking statements
speak only as of the date made, and unless legally required, HC2
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Contact:Investor
RelationsGarrett Edsonir@hc2.com(212) 235-2691
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