SunPower Corporation (Nasdaq: SPWRA; SPWRB) intends to offer 9,000,000 shares of its class A common stock and $175 million worth of senior convertible debentures due 2014 in registered public offerings. Credit Suisse and Deutsche Bank Securities are listed as the joint book-running managers. SunPower intends to grant the underwriters an overallotment option of an additional 1,350,000 shares of common stock and an additional $26.25 million in senior convertible debentures. The offering by the maker of high efficiency solar cells, solar panels, and solar systems should result in aggregate gross proceeds of approximately $400 million.
The debentures will be convertible into shares of SunPower’s class A common stock, and the interest rate, conversion rate, conversion price and other terms will be determined at the time of the pricing; although generally that is within a day or two of these sort of corporate announcements.
SunPower does plan to enter into convertible debenture hedge and warrant transactions in connection with the offering of the senior convertible debentures. SunPower will use approximately $20 million to $22 million of the proceeds to pay the cost of these convertible debenture hedge and warrant transactions; and the remaining net proceeds are earmarked for general corporate purposes, including working capital and capital expenditures.
From time to time, SunPower will evaluate potential acquisitions and strategic transactions of business, technologies, or products, and may use a portion of the net proceeds for such acquisitions or transactions. SunPower also intends to use a portion of the proceeds to increase the size of the convertible note hedge transactions and for general corporate purposes, and the company may also sell additional warrants. The company may also repurchase some of its outstanding 1.25% debentures or 0.75% debentures.
Shares closed down 5% at $24.04 today and the market cap before the effects of this offering is $2.07 billion; its 52-week trading range is $18.50 to $107.00.
JON C. OGG
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