World Kinect Corporation Reduces Borrowing Costs with Closing of $350 Million 3.250% Convertible Senior Notes due 2028
27 Juin 2023 - 10:30PM
Business Wire
World Kinect Corporation (NYSE:WKC) (“World Kinect” or the
“Company”) announced that on June 26, 2023 it closed its previously
announced private offering of $350 million aggregate principal
amount of 3.250% Convertible Senior Notes due 2028 (the “Notes”).
In response to strong investor demand, World Kinect upsized the
initial offering of $250 million aggregate principal amount of the
Notes to $300 million and the initial purchasers fully exercised
their option to purchase an additional $50 million aggregate
principal amount of the Notes.
“This transaction diversifies the Company’s capital structure
while allowing us to reduce interest expense,” said Ira M. Birns,
executive vice president and chief financial officer. “We
structured the offering to protect equity investors with the
principal amount of the Notes to be paid in cash upon maturity. In
addition, dilution upon a conversion of the Notes will be mitigated
as a result of the related bond hedge transactions, which increased
the effective conversion price of the Notes to approximately
$40.14. The conversion price represents a premium of 80% over the
closing price of the common stock of $22.30 per share on June 21,
2023, the day that we priced the offering. We will also have the
option to further minimize dilution in the future by electing to
deliver the value of any conversion obligation owed in excess of
the principal amount of the Notes in cash, or a combination of cash
and shares.”
A portion of the proceeds from the transaction were used to pay
costs associated with the related bond hedge transactions and fees,
expenses associated with the offering of the Notes and the
repurchase of 2.24 million shares of the Company’s common stock.
The Company intends to use the remaining net proceeds primarily for
general corporate purposes, including the repayment of amounts
outstanding under its revolving credit facility.
The table below illustrates the potential net dilution
expectations from the overall transaction (shares in
thousands):
Potential Quarterly Average
Price(1)
Net Shares Issued Under
Notes
Net Shares Issued Under
Warrants
Total Dilutive Potential Shares for
GAAP
EPS(2)
Shares Received Under Bond
Hedges(3)
Total Expected Dilution at Maturity of
Notes(4)
Expected (%) Dilution at Maturity of
Notes(5)
$24.00
0.00
0.00
0.00
0.00
0.00
0.00%
$26.00
0.00
0.00
0.00
0.00
0.00
0.00%
$28.00
0.00
0.00
0.00
0.00
0.00
0.00%
$28.43
0.00
0.00
0.00
0.00
0.00
0.00%
$30.00
643.18
0.00
643.18
-643.18
0.00
0.00%
$32.00
1372.35
0.00
1372.35
-1372.35
0.00
0.00%
$34.00
2015.73
0.00
2015.73
-2015.73
0.00
0.00%
$36.00
2587.63
0.00
2587.63
-2587.63
0.00
0.00%
$38.00
3099.32
0.00
3099.32
-3099.32
0.00
0.00%
$40.00
3559.85
0.00
3559.85
-3559.85
0.00
0.00%
$40.14
3590.37
0.00
3590.37
-3590.37
0.00
0.00%
$42.00
3976.52
545.15
4521.67
-3976.52
545.15
0.88%
$44.00
4355.30
1079.91
5435.21
-4355.30
1079.91
1.74%
$46.00
4701.15
1568.17
6269.32
-4701.15
1568.17
2.52%
$48.00
5018.18
2015.74
7033.92
-5018.18
2015.74
3.24%
(1)
Although dilution continues beyond $48.00 per share, we have not
presented further data.
(2)
Represents incremental shares to be
included in determination of diluted EPS, pursuant to GAAP.
(3)
The bond hedge only offsets the actual
dilution from the Notes upon conversion or settlement.
(4)
Number of shares that represent the actual
dilution from the Notes at conversion or settlement, taking into
account the bond hedge and warrant transactions.
(5)
Represents expected dilution from the
Notes at conversion or settlement as a percentage, based upon
62,129,131 shares of common stock outstanding as of April 17,
2023.
The table above is for illustrative purposes and does not
represent the Company’s forecast of future stock performance.
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 use of proceeds and
the anticipated impact of the notes and the convertible note hedge
and warrant transactions on any future interest expense and
dilution upon a conversion of the notes. 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: risks associated with the hedge
counterparties and their ability to fulfill their contractual
obligations under the convertible note hedge transactions. 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 the Company’s business. Accordingly, the Company
undertakes 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/20230627346028/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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