World Kinect Corporation (NYSE:WKC) (“World Kinect” or the
“Company”) announced today the upsize and pricing of its private
offering of $300 million aggregate principal amount of 3.250%
Convertible Senior Notes due 2028 (the “notes”). The notes were
offered only to persons reasonably believed to be qualified
institutional buyers in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). World
Kinect has granted to the initial purchasers of the notes an option
to purchase, within a 13-day period beginning on, and including,
the date on which the notes are first issued, up to an additional
$50 million aggregate principal amount of the notes. The aggregate
principal amount of the offering was increased from the previously
announced offering size of $250 million (or $287.5 million if the
initial purchasers exercise their option to purchase additional
notes in full). The offering of the notes is expected to close on
June 26, 2023, subject to customary closing conditions.
As discussed below, in connection with the pricing of the notes,
World Kinect has entered into privately negotiated convertible note
hedge transactions and warrant transactions. The convertible note
hedge transactions will cover, subject to customary anti-dilution
adjustments, the number of shares of common stock that initially
underlie the notes, and have an initial strike price equal to the
initial conversion price of the notes, or approximately $28.43 per
share. The strike price of the warrant transactions will initially
be $40.14 per share, which represents a premium of 80% over the
closing price of the common stock of $22.30 per share on June 21,
2023 and is subject to certain adjustments under the terms of the
warrant transactions.
World Kinect expects the net proceeds from the offering of the
notes to be approximately $291.0 million ($339.5 million if the
initial purchasers exercise their option to purchase the additional
notes in full) after deducting the initial purchasers’ discounts
but before deducting offering expenses payable by World Kinect.
World Kinect intends to use the net proceeds from the offering (i)
primarily for general corporate purposes, including the repayment
of a portion of the amounts outstanding under the revolving credit
facility, (ii) to pay the approximately $26.2 million cost of the
convertible note hedge transactions described below (after such
cost is partially offset by the proceeds to World Kinect from the
sale of the warrant transactions described below) and (iii) to
repurchase approximately 2.24 million shares of World Kinect’s
common stock (“common stock”) from purchasers of the notes in this
offering for an aggregate purchase price of approximately $50.0
million. This repurchase of common stock could affect the market
price of the common stock concurrently with, or shortly after, the
pricing of the notes, and could result in a higher effective
conversion price for the notes. If the initial purchasers exercise
their option to purchase additional notes, World Kinect expects to
enter into additional convertible note hedge transactions and
warrant transactions, and intends to use a portion of the net
proceeds from the sale of any such additional notes to pay the
costs of such additional convertible note hedge transactions (which
would be partially offset by the proceeds to World Kinect from the
sale of additional warrant transactions). World Kinect intends to
use the remainder of the net proceeds from the sale of such
additional notes for general corporate purposes, including
repayment of additional amounts outstanding under the revolving
credit facility.
The notes will be World Kinect’s senior, unsecured obligations.
The notes will bear interest at a rate of 3.250% per year, payable
semiannually in arrears on January 1 and July 1 of each year,
beginning on January 1, 2024. The notes will mature on July 1,
2028, unless earlier repurchased, redeemed or converted. The
initial conversion rate is 35.1710 shares of common stock per
$1,000 principal amount of notes, which is equivalent to an initial
conversion price of approximately $28.43 per share, representing a
premium of approximately 27.5% over the closing price of the common
stock of $22.30 per share on June 21, 2023. World Kinect will
satisfy any conversion elections by paying cash up to the aggregate
principal amount of the notes to be converted, and paying or
delivering, as the case may be, cash, shares of common stock or a
combination of cash and shares of common stock, at World Kinect’s
election, in respect of the remainder, if any, of its conversion
obligation in excess of the aggregate principal amount of the notes
to be converted.
World Kinect may redeem for cash all or any portion of the
notes, at its option at any time and from time to time, on or after
July 6, 2026 if the last reported sale price of the common stock
has been at least 130% of the conversion price then in effect for
at least 20 trading days (whether or not consecutive) during any 30
consecutive trading-day period (including the last trading day of
such period) ending on, and including, the trading day immediately
preceding the date on which World Kinect provides the related
notice of redemption at a redemption price equal to 100% of the
principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date. No
sinking fund is provided for the notes. If World Kinect undergoes a
fundamental change (as defined in the indenture governing the
notes), holders may require World Kinect to repurchase for cash all
or part of their notes at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus accrued and
unpaid interest, if any, to, but excluding, the fundamental change
repurchase date.
In connection with the pricing of the notes, World Kinect has
entered into privately negotiated convertible note hedge agreements
with certain of the initial purchasers of the notes or their
respective affiliates and certain other financial institutions (the
“hedge counterparties”). The convertible note hedge transactions
will cover, subject to customary anti-dilution adjustments, the
number of shares of common stock that initially underlie the notes,
and are expected to reduce the potential dilution to the common
stock and/or offset potential cash payments in excess of the
principal amount upon conversion of the notes. World Kinect also
has entered into warrant transactions with the hedge counterparties
relating to the same number of shares of common stock, subject to
customary anti-dilution adjustments. The warrant transactions could
have a dilutive effect on the common stock to the extent that the
market price per share of the common stock exceeds the strike price
of the warrants on the applicable expiration dates. The strike
price of the warrant transactions will initially be $40.14 per
share, which represents a premium of 80% over the closing price of
the common stock of $22.30 per share on June 21, 2023 and is
subject to certain adjustments under the terms of the warrant
transactions.
In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, the hedge
counterparties, or their affiliates, expect to purchase shares of
the 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. These activities could have the effect of
increasing, or reducing the size of any decline in, the market
price of the common stock or the notes at that time. In addition,
the hedge counterparties, or their affiliates, may modify their
hedge positions by entering into or unwinding various derivative
transactions with respect to the common stock and/or by purchasing
or selling the common stock or other securities of World Kinect in
secondary market transactions prior to the maturity of the notes,
and are likely to do so during any observation period related to a
conversion of notes. The effect, if any, of these activities on the
market price of the common stock or the notes will depend in part
on market conditions and cannot be ascertained at this time, but
any of these activities could cause or prevent an increase or
decline in the market price of the common stock or the notes, which
could affect holders’ ability to convert the notes and, to the
extent the activity occurs during any observation period related to
a conversion of notes, it could affect the amount of cash and the
number and value of shares of the common stock, if any, that
holders will receive upon conversion of the notes.
The notes and any shares of the common stock issuable upon
conversion of the notes have not been registered under the
Securities Act or under any U.S. state securities laws or other
jurisdiction and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities nor shall
there be any sale of these securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities
laws of any such state or jurisdiction.
About World Kinect
Corporation
Headquartered in Miami, Florida, World Kinect Corporation is a
leading global energy management company, offering a broad suite of
energy advisory, management and fulfillment services, digital and
other technology solutions, as well as sustainability products and
services across the energy product spectrum. In addition to our
core energy offerings to customers in the transportation sector, we
have expanded our product and service offerings to include energy
advisory services, sustainability and renewable energy solutions,
as well as supply fulfillment for natural gas and power. We
continue to focus on advancing the energy transition to lower
carbon alternatives through expanding our portfolio of energy
solutions and providing customers with greater access to
sustainably sourced energy.
For more information, visit corp.worldkinect.com
Information Relating to Forward-Looking
Statements
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding the anticipated terms of the notes
being offered, the completion, timing and size of the proposed
offering, the anticipated amount and use of proceeds and the
anticipated terms of the convertible note hedge and warrant
transactions. These forward-looking statements are qualified in
their entirety by cautionary statements and risk factor disclosures
contained in the Company’s Securities and Exchange Commission
(“SEC”) filings, including the Company’s most recent Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC.
Actual results may differ materially from any forward-looking
statements due to risks and uncertainties, including, but not
limited to: market conditions, including market interest rates,
market demand for the notes being issued, the trading price and
volatility of our common stock and other risks that could affect
the creditworthiness of the Company and the ability of the Company
to complete the offering on the anticipated terms, if at all. New
risks emerge from time to time and it is not possible for
management to predict all such risk factors or to assess the impact
of such risks on our business. Accordingly, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, changes in
expectations, future events, or otherwise, except as required by
law.
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version on businesswire.com: https://www.businesswire.com/news/home/20230621470006/en/
Ira M. Birns Executive Vice President & Chief Financial
Officer
Elsa Ballard Vice President of Investor Relations
investor@worldkinect.com
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