Invacare Corp. Completes Private Exchange to Retire Approximately $35 Million Principal Amount of Its 5.0% Convertible Senior...
June 04 2020 - 5:26PM
Business Wire
Invacare Corporation (NYSE: IVC) (the “Company”) announced the
completion today of its previously announced separate private
exchange transactions in which certain holders of its 5.0%
Convertible Senior Notes due 2021 (the “2021 Notes”) and certain
holders of its 4.5% Convertible Senior Notes due 2022 (the “2022
Notes”) exchanged approximately $35.4 million in aggregate
principal amount of 2021 Notes and $38.5 million in aggregate
principal amount of 2022 Notes, for aggregate consideration of
approximately $73.9 million in aggregate principal amount of new
5.0% Series II Convertible Senior Exchange Notes due 2024 (the “New
Notes”). Exchanging holders of the 2021 Notes received an equal
principal amount of New Notes, plus an amount of cash equal to the
accrued and unpaid interest on the exchanged 2021 Notes up to, but
excluding the closing date and approximately $4.2 million in cash.
Exchanging holders of the 2022 Notes received an equal principal
amount of New Notes, plus an amount of cash equal to the accrued
and unpaid interest on the exchanged 2022 Notes up to, but
excluding the closing date and approximately $1.3 million in cash.
Following the closing of these transactions, approximately $25.7
million in aggregate principal amount of the 2021 Notes and $81.5
million in aggregate principal amount of the 2022 Notes remain
outstanding with terms unchanged.
The New Notes bear interest at a rate of 5.0% per year payable
semi-annually in arrears on May 15 and November 15 of each year,
beginning November 15, 2020. Interest on the New Notes will accrue
from June 4, 2020. The principal amount of the New Notes also will
accrete at a rate of approximately 4.7% per year commencing June 4,
2020, compounding on a semi-annual basis. The accreted portion of
the principal is payable in cash upon maturity but does not bear
interest and is not convertible into the Company’s common shares.
The New Notes will mature on November 15, 2024, unless earlier
repurchased, redeemed or converted. Additional terms of the New
Notes are summarized in the Company’s press release issued on June
1, 2020 and the Form 8-K filed by the Company with the Securities
and Exchange Commission on June 4, 2020.
“As part of our multi-pronged approach, we are pleased to have
taken further action to strengthen our balance sheet by extending
the maturity of approximately $35 million of our 2021 Notes and $39
million of our 2022 Notes to 2024,” said Matt Monaghan, chairman,
president and chief executive officer. “While this is not new
capital, this private exchange, along with other steps we have
taken to manage costs and conserve cash, is a timely enhancement to
the balance sheet, in light of the impacts of the COVID-19 pandemic
on our business. This refinancing represents another significant
milestone as we continue to make measurable progress to transform
the business and return the company to profitability and
growth.”
Kathy Leneghan, senior vice president and chief financial
officer stated, “We are pleased that the exchange allows us to
extend our near-term maturities while preserving shareholder value.
The New Notes are substantially similar to the Company’s existing
convertible notes due in 2024 and carry the same interest rate and
conversion rate, which implies an incremental increase of
approximately 504,000 common shares, or approximately 1.5% compared
to the common shares underlying the notes to be exchanged. The deal
terms include a provisional redemption option to limit shareholder
dilution at higher share prices and include cash as a portion of
the exchange. In the event the New Notes are not earlier converted,
redeemed or repurchased, noteholders will receive accreted
principal as additional compensation, resulting in higher debt
balances for the Company at maturity. By completing this
transaction, we have enhanced our financial flexibility and our
ability to weather the near-term negative impacts of the COVID-19
pandemic.”
The New Notes and the Company’s common shares that may be
issuable upon conversion of the New Notes have not been registered
under the Securities Act, or the securities laws of any other
jurisdiction and, unless so registered, may not be offered or sold
in the United States except in transactions exempt from, or not
subject to, the registration requirements of the Securities Act and
any applicable state securities laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
About Invacare Corporation
Invacare Corporation (NYSE: IVC) is a leading manufacturer and
distributor in its markets for medical equipment used in non-acute
care settings. At its core, the Company designs, manufactures, and
distributes medical devices that help people to move, breathe, rest
and perform essential hygiene. The Company provides clinically
complex medical device solutions for congenital (e.g., cerebral
palsy, muscular dystrophy, spina bifida), acquired (e.g., stroke,
spinal cord injury, traumatic brain injury, post-acute recovery,
pressure ulcers) and degenerative (e.g., ALS, multiple sclerosis,
chronic obstructive pulmonary disease, age related, bariatric)
conditions. The Company’s products are important parts of care for
people with a wide range of challenges, from those who are active
and involved in work or school each day and may need additional
mobility or respiratory support, to those who are cared for in
residential care settings, at home and in rehabilitation centers.
The Company sells its products principally to home medical
equipment providers with retail and e-commerce channels,
residential care operators, distributors and government health
services in North America, Europe and Asia Pacific.
Forward-Looking Statements
This press release contains “forward-looking statements”. All
statements, other than statements of historical facts, included in
this press release may be deemed forward-looking statements. The
Company uses the words “anticipate(s),” “believe(s),”
“estimate(s),” “expect(s),” “intend(s),” “may,” “plan(s),”
“project(s),” “will,” “would” and similar expressions to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. These statements
relating to the offering of the notes include, but are not limited
to: whether the New Notes will be convertible into the Company’s
common shares, or convertible at all. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain. Specific risks and uncertainties that could cause actual
results to differ materially from those expressed in the Company’s
forward-looking statements include: changes in market conditions
and demands on the Company’s cash. Other risks include those
described in the “Risk Factors” section of the Company’s Annual
Report on Form 10-K for the year ended December 31, 2019, as
updated by, and as otherwise described in, the Company’s subsequent
reports filed with the SEC. These risks and uncertainties may cause
the Company’s actual future actions or results to differ materially
from those expressed in the forward-looking statements.
Forward-looking statements speak only as to the date on which they
are made, and, except as may be required by law, the Company
undertakes no obligation to update publicly or revise any
forward-looking statement, regardless of whether new information
becomes available, future developments occur or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200604005775/en/
Investor Contact: Lois Lee loislee@invacare.com (440)
329-6435
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