Company negotiates deal with Wanxiang; placement includes warrants
By Devika Patel
Knoxville, Tenn., Aug. 8 - A123 Systems, Inc. said it will raise $75 million through a senior secured bridge loan with Wanxiang. The investor will also buy $200 million of the company's 8% senior secured convertible notes.
The loan accrues interest at 10% and matures in August 2014. Wanxiang also will receive 100% warrant coverage with the loan. Each of the warrants is exercisable at $0.425 for five years. The strike price is a 9.58% discount to the Aug. 7 closing price of $0.47.
The 8% convertibles, which mature in five years, are convertible into common stock at $0.60 per share, a 27.66% premium to the Aug. 7 closing share price.
Wanxiang also will receive 50% warrant coverage with the notes. Each of these warrants is exercisable at $0.60 for five years. The strike price is also a 27.66% premium to the Aug. 7 closing price.
Based in Waltham, Mass., A123 designs, develops, manufactures and sells rechargeable lithium-ion batteries and battery systems.
| Issuer: | A123 Systems, Inc.
|
| Issue: | Senior secured bridge loan, senior secured convertible notes
|
| Amount: | $275 million
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| Investor: | Wanxiang
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| Pricing date: | Aug. 8
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| Stock symbol: | Nasdaq: AONE
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| Stock price: | $0.47 at close Aug. 7
|
| Market capitalization: | $69.78 million
|
|
|
| Bridge loan
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| Amount: | $75 million
|
| Maturity: | August 2014
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| Coupon: | 10%
|
| Warrants: | 100% coverage
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.425
|
|
|
| Convertibles
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| Amount: | $200 million
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| Maturity: | Five years
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| Coupon: | 8%
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| Conversion price: | $0.60
|
| Warrants: | 50% coverage
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.60
|
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