Applied Optoelectronics Announces Entry into Exchange Transactions for 2026 Notes and Pricing of a Concurrent Registered Direct Offering
Applied Optoelectronics (AAOI) has announced two concurrent financial transactions: an exchange of approximately $76.7 million of its 2026 Convertible Notes for $125 million of new 2030 Notes, 1.49 million shares of common stock, and $89.6 thousand in cash; and a registered direct offering of 1.04 million shares at $33.97 per share.
The new 2030 Notes will bear a 2.75% interest rate, mature on January 15, 2030, and have an initial conversion price of $43.31 per share. The notes will be convertible under specific circumstances, with settlement in cash, stock, or a combination thereof. The company plans to use the proceeds from the registered direct offering for general corporate purposes, including potential capital expenditures and working capital.
Applied Optoelectronics (AAOI) ha annunciato due operazioni finanziarie concomitanti: uno scambio di circa 76,7 milioni di dollari delle sue Note Convertibili 2026 per 125 milioni di dollari di nuove Note 2030, 1,49 milioni di azioni ordinarie e 89,6 mila dollari in contante; e un'offerta diretta registrata di 1,04 milioni di azioni a 33,97 dollari per azione.
Le nuove Note 2030 porteranno un tasso d'interesse del 2,75%, scadranno il 15 gennaio 2030 e avranno un prezzo di conversione iniziale di 43,31 dollari per azione. Le note saranno convertibili in specifiche circostanze, con regolamento in contante, azioni o una combinazione di entrambi. L'azienda prevede di utilizzare i proventi dall'offerta diretta registrata per scopi aziendali generali, inclusi potenziali spese in conto capitale e capitale circolante.
Applied Optoelectronics (AAOI) ha anunciado dos transacciones financieras simultáneas: un intercambio de aproximadamente 76.7 millones de dólares de sus Notas Convertibles 2026 por 125 millones de dólares de nuevas Notas 2030, 1.49 millones de acciones ordinarias y 89,6 mil dólares en efectivo; y una oferta directa registrada de 1.04 millones de acciones a 33.97 dólares por acción.
Las nuevas Notas 2030 tendrán una tasa de interés del 2.75%, vencerán el 15 de enero de 2030 y tendrán un precio de conversión inicial de 43.31 dólares por acción. Las notas serán convertibles bajo ciertas circunstancias, con liquidación en efectivo, acciones o una combinación de ambos. La compañía planea utilizar los ingresos de la oferta directa registrada para fines corporativos generales, incluidos posibles gastos de capital y capital de trabajo.
응용광전자(AAOI)가 두 가지 동시 재무 거래를 발표했습니다: 2026년 전환사채 약 7억 6700만 달러를 새로운 2030년 사채 12억 5000만 달러, 149만 주의 보통주, 8만 9600 달러의 현금으로 교환하고; 주당 33.97달러의 104만 주를 등록된 직접 제공으로 판매합니다.
새로운 2030년 사채는 2.75%의 이자율을 적용받으며, 2030년 1월 15일에 만료되고, 주당 43.31달러의 초기 전환 가격을 갖습니다. 이 사채는 특정 상황에서 현금, 주식 또는 그 조합으로 정산할 수 있는 조건으로 전환 가능합니다. 회사는 등록된 직접 제공에서 얻은 수익을 일반 기업 용도로 사용하며, 잠재적인 자본 지출 및 운영 자금으로 활용할 계획입니다.
Applied Optoelectronics (AAOI) a annoncé deux opérations financières simultanées : l'échange d'environ 76,7 millions de dollars de ses Obligations Convertibles 2026 contre 125 millions de dollars de nouvelles Obligations 2030, 1,49 million d'actions ordinaires et 89,6 mille dollars en espèces ; et une offre directe enregistrée de 1,04 million d'actions à 33,97 dollars par action.
Les nouvelles Obligations 2030 porteront un taux d'intérêt de 2,75 %, arriveront à échéance le 15 janvier 2030 et auront un prix de conversion initial de 43,31 dollars par action. Les obligations seront convertibles dans des circonstances spécifiques, avec un règlement en espèces, en actions ou une combinaison de ces options. La société prévoit d'utiliser les recettes de l'offre directe enregistrée à des fins corporatives générales, y compris les éventuelles dépenses d'investissement et le fonds de roulement.
Applied Optoelectronics (AAOI) hat zwei gleichzeitig ablaufende Finanztransaktionen bekannt gegeben: den Austausch von etwa 76,7 Millionen US-Dollar seiner Wandelanleihen 2026 gegen 125 Millionen US-Dollar neuer Anleihen 2030, 1,49 Millionen Stammaktien und 89,6 Tausend US-Dollar in bar; sowie ein registriertes Direktangebot von 1,04 Millionen Aktien zu 33,97 US-Dollar pro Aktie.
Die neuen Anleihen 2030 werden einen Zinssatz von 2,75% haben, am 15. Januar 2030 fällig werden und einen anfänglichen Umwandlungspreis von 43,31 US-Dollar pro Aktie aufweisen. Die Anleihen sind unter bestimmten Umständen umwandelbar, wobei die Abwicklung in bar, Aktien oder einer Kombination aus beidem erfolgt. Das Unternehmen plant, die Erlöse aus dem registrierten Direktangebot für allgemeine Unternehmenszwecke, einschließlich möglicher Investitionsausgaben und Betriebskapital, zu verwenden.
- Lower interest rate on new notes (2.75% vs 5.25% on previous notes)
- Extended debt maturity from 2026 to 2030
- Additional capital raised through registered direct offering
- Conversion price of $43.31 represents 27.50% premium to current stock price
- Significant dilution through issuance of 2.52 million new shares (1.49M exchange + 1.04M offering)
- Increased debt principal ($125M vs $76.7M)
- Additional potential dilution from future note conversions
Insights
This complex debt restructuring and equity offering represents a strategic financial maneuver by Applied Optoelectronics. The company is effectively extending its debt maturity by exchanging
The concurrent registered direct offering of 1,036,458 shares at
For retail investors: Think of this like refinancing a mortgage at a lower rate while getting extra cash from a home equity line - it improves monthly payments and provides more financial flexibility. The company is buying itself more time and breathing room while reducing interest expenses.
The market implications of this financial restructuring are noteworthy. The successful placement of new convertible notes at a
The additional equity component through both the exchange (1.49M shares) and direct offering (1.04M shares) represents about
SUGAR LAND, Texas, Dec. 19, 2024 (GLOBE NEWSWIRE) -- Applied Optoelectronics, Inc. (NASDAQ: AAOI) (“AOI,” “we,” “us” or “our”) announced today that it has entered into transactions with holders (the “Noteholders”) of its
The 2030 Notes will be our senior, unsecured obligations and will be equal in right of payment with our existing and future senior, unsecured indebtedness, senior in right of payment to our existing and future indebtedness that is expressly subordinated to the 2030 Notes and effectively subordinated to our existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The 2030 Notes will bear interest at a rate of
The 2030 Notes will be convertible at the option of holders of the 2030 Notes under certain specified circumstances, as set forth in the indenture governing the 2030 Notes. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on the applicable conversion rate.
The initial conversion rate will be approximately 23.0884 shares of our common stock per
Except in connection with the completion of the Specified Divestiture (as described below), we may not redeem the 2030 Notes prior to January 15, 2027. On or after January 15, 2027, and on or before the 40th scheduled trading day immediately before the maturity date, we may redeem all or part of the 2030 Notes for cash if the last reported sale price per share of our common stock exceeds
The issuance of the 2030 Notes, the Exchange Shares and the shares of our common stock issuable upon conversion of the 2030 Notes have not been registered under the Securities Act, and the 2030 Notes, the Exchange Shares and such shares issuable upon conversion of the 2030 Notes may not be offered or sold without registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws, or in transactions not subject to those registration requirements.
Raymond James & Associates, Inc. acted as AOI’s exclusive financial advisor in connection with the Exchanges.
Concurrently with the Exchanges, AOI announced today that it has priced an issuance of an aggregate of 1,036,458 shares of common stock, at a purchase price of
We intend to use the net proceeds from the Registered Direct Offering for general corporate purposes, which may include, among other things, capital expenditures and working capital. We may also use such proceeds to fund acquisitions of businesses, technologies or product lines that complement our current business; however, we have no present plans, agreements or commitments with respect to any potential acquisition.
Raymond James & Associates, Inc. acted as the sole placement agent in connection with the Registered Direct Offering. The Registered Direct Offering was made pursuant to an automatic shelf registration statement on Form S-3ASR (Registration File No. 333-283905), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 18, 2024, and became effective immediately upon filing, including the prospectus contained therein, as supplemented by the prospectus supplement filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on December 18, 2024. The prospectus supplement and accompanying prospectus relating to the Registered Direct Offering will be available on the SEC’s website at www.sec.gov.
The Exchanges and Registered Direct Offering are expected to close concurrently on or about December 23, 2024,
subject to customary closing conditions.
Haynes Boone LLP is acting as legal advisor to AOI and Mayer Brown LLP is acting as legal advisor to Raymond James & Associates, Inc., in connection with the Exchanges and the Registered Direct Offering.
This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Forward-Looking Information
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “could,” “would,” “target,” “seek,” “aim,” “predicts,” “think,” “objectives,” “optimistic,” “new,” “goal,” “strategy,” “potential,” “is likely,” “will,” “expect,” “plan” “project,” “permit” or by other similar expressions that convey uncertainty of future events or outcomes. Such forward-looking statements reflect the views of management at the time such statements are made. These forward-looking statements involve risks and uncertainties, as well as assumptions and current expectations, which could cause our actual results to differ materially from those anticipated in such forward-looking statements. These risks and uncertainties include but are not limited to: reduction in the size or quantity of customer orders; change in demand for our products due to industry conditions; changes in manufacturing operations; volatility in manufacturing costs; delays in shipments of products; disruptions in the supply chain; change in the rate of design wins or the rate of customer acceptance of new products; our reliance on a small number of customers for a substantial portion of its revenues; potential pricing pressure; a decline in demand for our customers’ products or their rate of deployment of their products; general conditions in the internet datacenter, cable television (CATV) broadband, telecom, or fiber-to-the-home (FTTH) markets; changes in the world economy (particularly in the United States and China); changes in the regulation and taxation of international trade, including the imposition of tariffs; changes in currency exchange rates; the negative effects of seasonality; the impact of any pandemics or similar events on our business and financial results; and other risks and uncertainties described more fully in our documents filed with or furnished to the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024. More information about these and other risks that may impact our business are set forth in the “Risk Factors” section of our quarterly and annual reports on file with the SEC. You should not rely on forward-looking statements as predictions of future events. All forward-looking statements in this press release are based upon information available to us as of the date hereof, and qualified in their entirety by this cautionary statement. Except as required by law, we assume no obligation to update forward-looking statements for any reason after the date of this press release to conform these statements to actual results or to changes in our expectations.
About Applied Optoelectronics
Applied Optoelectronics Inc. (AOI) is a leading developer and manufacturer of advanced optical products, including components, modules and equipment. AOI’s products are the building blocks for broadband fiber access networks around the world, where they are used in the CATV broadband, internet datacenter, telecom and FTTH markets. AOI supplies optical networking lasers, components and equipment to tier-1 customers in all four of these markets. In addition to its corporate headquarters, wafer fab and advanced engineering and production facilities in Sugar Land, TX, AOI has engineering and manufacturing facilities in Taipei, Taiwan and Ningbo, China.
Investor Relations Contacts:
The Blueshirt Group, Investor Relations
Lindsay Savarese
+1-212-331-8417
ir@ao-inc.com
Cassidy Fuller
+1-415-217-4968
ir@ao-inc.com
FAQ
What are the key terms of AAOI's new 2030 Convertible Notes?
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