World Kinect Corporation Announces Proposed Offering of $250 Million Convertible Senior Notes due 2028
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 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 up to
The notes will be World Kinect’s senior, unsecured obligations. The notes are expected to pay interest semiannually in arrears and to mature on
In connection with the pricing of the notes, World Kinect expects to enter into privately negotiated convertible note hedge agreements with certain of the initial purchasers of the notes or their respective affiliates and/or 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 expects to enter 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.
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 the 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 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 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
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.
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
Executive Vice President & Chief Financial Officer
Vice President of Investor Relations