World Kinect Corporation (NYSE:WKC) (“World Kinect” or “the
Company”) announced today that it intends to offer, subject to
market and other conditions, $250 million aggregate principal
amount of Convertible Senior Notes due 2028 (the “notes”) in a
private offering. The notes will be offered only to persons
reasonably believed to be qualified institutional buyers in
accordance with Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”). World Kinect also expects to grant
to the initial purchasers of the notes an option to purchase,
within a 13-day period beginning on, and including, the date on
which the notes are first issued, up to an additional $37.5 million
aggregate principal amount of the notes.
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 $50 million worth of World Kinect common stock (“common
stock”) from purchasers of the notes in this offering. This
repurchase of common stock could affect the market price of the
common stock concurrently with, or shortly after, the pricing of
the notes, and could result in a higher effective conversion price
for the notes. If the initial purchasers exercise their option to
purchase additional notes, World Kinect expects to enter into
additional convertible note hedge transactions and warrant
transactions, and intends to use a portion of the net proceeds from
the sale of any such additional notes to pay the costs of such
additional convertible note hedge transactions (which would be
partially offset by the proceeds to World Kinect from the sale of
additional warrant transactions). World Kinect intends to use the
remainder of the net proceeds from the sale of such additional
notes for general corporate purposes, including repayment of
additional amounts outstanding under the revolving credit
facility.
The notes will be World Kinect’s senior, unsecured obligations.
The notes are expected to pay interest semiannually in arrears and
to mature on July 1, 2028, unless earlier repurchased, redeemed or
converted. World Kinect will satisfy any conversion elections by
paying cash up to the aggregate principal amount of the notes to be
converted, and paying or delivering, as the case may be, cash,
shares of the common stock or a combination of cash and shares of
the common stock, at World Kinect’s election, in respect of the
remainder, if any, of its conversion obligation in excess of the
aggregate principal amount of the notes to be converted. The
interest rate, initial conversion rate and other terms of the notes
will be determined by negotiations between World Kinect and the
initial purchasers of the notes.
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 U.S. state securities laws or other
jurisdiction and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements.
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.
About World Kinect
Corporation
Headquartered in Miami, Florida, World Kinect Corporation is a
leading global energy management company, offering a broad suite of
energy advisory, management and fulfillment services, digital and
other technology solutions, as well as sustainability products and
services across the energy product spectrum. In addition to our
core energy offerings to customers in the transportation sector, we
have expanded our product and service offerings to include energy
advisory services, sustainability and renewable energy solutions,
as well as supply fulfillment for natural gas and power. We
continue to focus on advancing the energy transition to lower
carbon alternatives through expanding our portfolio of energy
solutions and providing customers with greater access to
sustainably sourced energy.
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 Securities and Exchange Commission
(“SEC”) filings, including the Company’s most recent Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC.
Actual results may differ materially from any forward-looking
statements due to risks and uncertainties, including, but not
limited to: market conditions, including market interest rates,
market demand for the notes being issued, the trading price and
volatility of our common stock and other risks that could affect
the creditworthiness of the Company and the ability of the Company
to complete the offering on the anticipated terms, if at all. New
risks emerge from time to time and it is not possible for
management to predict all such risk factors or to assess the impact
of such risks on our business. Accordingly, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, changes in
expectations, future events, or otherwise, except as required by
law.
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version on businesswire.com: https://www.businesswire.com/news/home/20230620504363/en/
Ira M. Birns Executive Vice President & Chief Financial
Officer
Elsa Ballard Vice President of Investor Relations
investor@worldkinect.com
World Kinect (NYSE:WKC)
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