Plug Power Inc. (“Plug Power”) (NASDAQ:PLUG) today announced the
pricing of $100 million aggregate principal amount of Convertible
Senior Notes due 2023 (the “notes”) in a private offering (the
“offering”) to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). Plug Power also granted the initial purchasers of the
notes a 13-day option to purchase up to an additional $15 million
aggregate principal amount of the notes. The sale of the notes to
the initial purchasers is expected to settle on March 27, 2018,
subject to customary closing conditions, and is expected to result
in approximately $96.3 million in net proceeds to Plug Power after
deducting the initial purchasers’ discount and estimated offering
expenses payable by Plug Power (assuming no exercise of the initial
purchasers’ option to purchase additional notes).
The notes will be senior, unsecured obligations of Plug Power.
The notes will bear interest at a rate of 5.50% per year. Interest
will be payable semi-annually in arrears on March 15 and September
15 of each year, beginning on September 15, 2018. The notes will
mature on March 15, 2023, unless earlier repurchased, redeemed or
converted. Plug Power may not redeem the notes prior to March 20,
2021; on or after March 20, 2021, Plug Power may redeem the notes
only upon the occurrence of certain events and during certain
periods. Holders of the notes will have the right to require
Plug Power to repurchase all or a portion of their notes upon the
occurrence of a fundamental change (as defined in the indenture
governing the notes) at a purchase price of 100% of their principal
amount plus any accrued and unpaid interest to, but excluding, the
relevant fundamental change repurchase date.
The notes will be convertible at an initial conversion rate of
436.3002 shares of Plug Power’s common stock per $1,000 principal
amount of notes (equivalent to an initial conversion price of
approximately $2.29 per share, which represents a conversion
premium of approximately 20% to the last reported sale price of
$1.91 per share of Plug Power’s common stock on The NASDAQ Capital
Market on March 22, 2018).
Prior to the close of business on the business day immediately
preceding September 15, 2022, the notes will be convertible at the
option of the noteholders only upon the satisfaction of specified
conditions and during certain periods. On or after September 15,
2022 until the close of business on the second scheduled trading
day immediately preceding the maturity date, the notes will be
convertible at the option of the noteholders at any time regardless
of these conditions. Conversions of the notes will be settled in
cash, shares of Plug Power’s common stock, or a combination
thereof, at Plug Power’s election.
In connection with the pricing of the notes, Plug Power entered
into capped call transactions with one or more of the initial
purchasers of the notes or their respective affiliates (the “option
counterparties”). The capped call transactions are expected
generally to reduce or offset the potential dilution to Plug
Power’s common stock upon any conversion of notes and/or offset any
cash payments Plug Power is required to make in excess of the
principal amount of converted notes, as the case may be, with such
reduction and/or offset subject to a cap based on the cap
price. The cap price of the capped call transactions will
initially be $3.82 per share, which represents a premium of 100%
over the last reported sale price of Plug Power’s common stock of
$1.91 per share on March 22, 2018, and is subject to certain
adjustments under the terms of the capped call transactions.
If the initial purchasers of the notes exercise their option to
purchase additional notes, Plug Power expects to enter into
additional capped call transactions with the option
counterparties.
Plug Power expects that, in connection with establishing their
initial hedges of the capped call transactions, the option
counterparties or their respective affiliates will purchase shares
of Plug Power’s common stock and/or enter into various derivative
transactions with respect to the common stock concurrently with or
shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Plug Power’s common stock or the notes at that time. In
addition, Plug Power expects that the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to the
common stock and/or by purchasing or selling shares of the common
stock or other securities of Plug Power in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so during any
observation period related to a conversion of the notes).
This activity could also cause or avoid an increase or a decrease
in the market price of the common stock or the notes, which could
affect the ability of holders of notes to convert the notes and, to
the extent the activity occurs during any observation period
related to a conversion of the notes, it could affect the number of
shares of common stock and value of the consideration that holders
of notes will receive upon conversion of the notes.
In connection with the pricing of the notes, Plug Power entered
into prepaid forward stock purchase transactions (the “prepaid
forwards”) with one or more of the initial purchasers or their
respective affiliates (the “forward counterparties”), pursuant to
which Plug Power will purchase approximately $27.5 million worth of
its common stock (based on the closing sale price on the pricing
date), for settlement on the date that is the maturity date of the
notes, subject to any early settlement, in whole or in part, of
each prepaid forward.
Plug Power expects that, in connection with establishing their
initial hedges of the prepaid forwards, the forward counterparties
or their respective affiliates will enter into one or more
derivative transactions with respect to Plug Power’s common stock
with purchasers of the notes concurrently with or after the pricing
of the notes. The prepaid forwards are intended to allow
investors to establish short positions that generally correspond to
(but may be greater than) commercially reasonable initial hedges of
their investment in the notes. In the event of such greater
initial hedges, investors may offset such greater portion by
purchasing the common stock on the day of pricing of the
notes. Facilitating investors’ hedge positions by entering
into the prepaid forwards, particularly if investors purchase the
common stock on the pricing date, could increase (or reduce the
size of any decrease in) the market price of the common stock and
effectively raise the conversion price of the notes. In
addition, Plug Power expects that the forward counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding one or more derivative transactions with
respect to the common stock and/or purchasing or selling the common
stock or other securities of Plug Power in secondary market
transactions at any time following the pricing of the notes and
prior to the maturity of the notes. These activities could
also cause or avoid an increase or a decrease in the market price
of the common stock or the notes.
Plug Power expects to use the net proceeds of the offering of
the notes to pay the cost of the capped call transactions and the
aggregate prepayment of the prepaid forwards described above and to
use the remainder of the net proceeds from the offering of notes
for general corporate purposes, which may include working capital,
capital expenditures, potential acquisitions and strategic
transactions.
The notes were only offered to qualified institutional buyers
pursuant to Rule 144A under the Securities Act. Neither the notes
nor the shares of Plug Power’s common stock potentially issuable
upon conversion of the notes, if any, have been, or will be,
registered under the Securities Act or the securities laws of any
other jurisdiction, and unless so registered, may not be offered or
sold in the United States except pursuant to an applicable
exemption from such registration requirements.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
Cautionary Language Concerning Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, statements regarding the proposed terms of the notes, the size
of the offering, including the option to purchase additional notes
to the initial purchasers, the extent, and potential effects, of
the capped call transactions and the prepaid forwards, the
potential dilution to Plug Power’s common stock, the conversion
price for the notes and the expected use of the proceeds from the
sale of the notes, and other statements contained in this press
release that are not historical facts. These forward-looking
statements are made as of the date they were first issued and were
based on current expectations, estimates, forecasts and projections
as well as the beliefs and assumptions of management. Words such as
“expect,” “anticipate,” “should,” “believe,” “hope,” “target,”
“project,” “goals,” “estimate,” “potential,” “predict,” “may,”
“will,” “might,” “could,” “intend,” “shall” and variations of these
terms or the negative of these terms and similar expressions are
intended to identify these forward-looking statements.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond Plug Power’s control. Plug Power’s actual results could
differ materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to, risks detailed in Plug Power’s filings and reports with
the Securities and Exchange Commission (“SEC”), including
its Annual Report on Form 10-K for the fiscal year
ended December 31, 2017, as well as other filings and reports
that may be filed by Plug Power from time to time with
the SEC. Plug Power anticipates that subsequent events and
developments will cause its views to change. Plug
Power undertakes no intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. These forward-looking
statements should not be relied upon as representing Plug Power’s
views as of any date subsequent to the date of this press
release.
Plug Power Contact
Teal Vivacquamedia@plugpower.com
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