Energy
Evergreen Solar Decides To Sell $300M In Convertible Notes (ESLR)
Published:
Evergreen Solar, Inc. (NASDAQ: ESLR) came out after the close of trading today with the announcement that it filed a shelf registration statement to sell $300 million in senior convertible notes due 2013. Lehman Brothers Inc. is acting as the sole book-running manager for the notes offering. Evergreen Solar expects to grant a $45 million over-allotment option to the underwriters for a 30-day period.
The notes will be convertible into cash up to the principal amount and shares of Evergreen Solar’s common stock for the remainder. The interest rate, conversion rate, conversion price, offering price and all other terms of the notes will be determined at the time of pricing of the notes.
Net proceeds from the offering will be used to complete the construction and equipping of its newly announced solar panel manufacturing facility in Devens, Massachusetts and for other construction, purchases of or prepayments for polysilicon and other raw materials, and working capital needs.
Evergreen Solar also plans to enter into a capped call transaction with an affiliate of Lehman Brothers Inc. in an effort to increase the effective conversion premium of the notes and to reduce the potential dilution upon conversion of the notes.
Shares fell over 4% to $11.57 today, but shares are down 3% in after-hours at $11.20 in addition to today’s weakness. Companies think they are doing themselves a favor in these capped call and derivative transaction agreements, but Wall Street and Main Street don’t always agree as getting the full terms or the real details is not always the easiest thing to do for those who didn’t participate in the offering. To put this in comparison for a size of the company, Evergreen’s market cap at the close today was $1.4 Billion.
After that huge contract announcement last week with such a huge backlog, this might have been expected. But there are going to be some traders who chased this one up since that news release who aren’t going to have many great things to say about Evergreen Solar today or tomorrow.
Jon C. Ogg
June 24, 2008
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