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Investing

Solutia’s Second Secondary Comes At Deep Discount (SOA)

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By Douglas A. McIntyre Updated Published
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Solutia_logoWe have seen a secondary offering now priced out of Solutia Inc. (NYSE: SOA).  The company sold 10,714,284 shares of common stock at a price of $14.00 per share to raise some $150 million in gross proceeds and $145 million in net proceeds.

The company listed the use of funds from the offering to repay theremaining $128 million balance on its 15.5% bridge credit facility andfor general corporate purposes. This will pay off the facility in full.The joint underwriters were listed as Deutsche Bank and Jefferies.

Unfortunately, this was at a steeper discount than many such secondaryofferings.  Shares closed at $15.49 yesterday and shares have traded ina range of $11.02 to $15.98 since it has relaunched as a stock in lateMarch.  The good news is that this closes that bridge financing out for good.

What is interesting is that the company just on August 11 sold more than 22 million shares of common stock at $13.00 to put $277 million towards the $400 million bridge credit facility.  The company had previously stated that it planned to repay this facility before the end of February 2009. 

Jon C. Ogg
August 21, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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