Initial conversion premium is 27.5%; conversion price to be adjusted
By Angela McDaniels
Tacoma, Wash., July 5 - Satcon Technology Corp. sold $16 million of 7% two-year subordinated convertible notes to Capital Ventures International in a private placement. Lazard Capital Markets LLC was the agent.
The placement priced June 29 and settled June 30, according to an 8-K filing with the Securities and Exchange Commission.
The initial conversion price is $2.92, which is a 27.5% premium to the company's $2.29 closing share price on June 28.
On the 11th trading day following the public announcement of Satcon's financial results for the quarter ending Sept. 30, the conversion price will be adjusted to 110% of the average of the volume-weighted average price of the company's common stock for the 10 days ending on the day before the adjustment date, subject to a cap of $2.92.
Interest is payable monthly beginning on Nov. 1 and is payable in cash or common stock. If it is paid in common stock, the price per share will be the lower of (i) the then-current conversion price and (ii) 88% of the average of the VWAP of Satcon's common stock for the 10 days ending on the day before the payment date.
After Sept. 30, the company has a one-time option to force conversion if the closing price of its stock exceeds 175% of the conversion price for 30 consecutive trading days.
The company can redeem the convertibles beginning on the 60th day following the earlier to occur of (i) the first date on which the resale of common stock underlying the notes is covered by an effective registration statement and (ii) the six-month anniversary of the closing of the placement. The redemption price will be the greater of 125% of (i) par and (ii) the product of (a) the conversion rate and (b) the greatest closing sale price of the company's common stock on any trading day during the period starting on the date the redemption notice is given and ending on the date immediately prior to redemption.
The proceeds will be used for general corporate purposes.
In connection with the placement, the company changed the exercise price of some outstanding warrants to $2.00 per share.
Also on Tuesday, the company said it will fire 85 employees, representing about 15% of its workforce, to reduce operating expenses and improve its cost structure. Most of the termination notices were given on Thursday.
Boston-based Satcon makes utility-grade power conversion products for the renewable energy market.
| Issuer: | Satcon Technology Corp.
|
| Issue: | Subordinated convertible notes
|
| Amount: | $16 million
|
| Maturity: | July 1, 2013
|
| Coupon: | 7%, payable monthly in cash or common stock
|
| Initial conversion price: | $2.92
|
| Price: | Par
|
| Issuer conversion option: | After Sept. 30, company can force conversion if closing stock price exceeds 175% of conversion price for 30 consecutive trading days
|
| Call option: | At greater of 125% of (i) par and (ii) product of (a) conversion rate and (b) greatest closing stock price during specified period
|
| Warrants: | No
|
| Investor: | Capital Ventures International
|
| Agent: | Lazard Capital Markets LLC
|
| Pricing date: | June 29
|
| Settlement date: | June 30
|
| Stock symbol: | Nasdaq: SATC
|
| Stock price: | $1.95 at close July 5
|
| Market capitalization: | $232.13 million
|
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