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Arch Resources privately negotiates exchanges for 5.25% convertibles
Chicago, May 19 – Arch Resources Inc. will be exchanging $125.2 million principal amount of 5.25% convertible senior notes due 2025 via privately negotiated exchange agreements with a limited number of holders of the issue, according to a press release.
The company will pay $130.1 million in cash and a number of shares of Arch Resources’ common stock to be determined over a four consecutive trading day period starting May 19.
After the exchange, there will be around $30 million of the convertibles outstanding.
The company has undertaken the exchanges to simplify its capital structure and has opted for a substantial amount of cash in the settlement process to limit overall stock dilution, prevent potential future dilution stemming from expected future dividend payments, reduce overall debt, and eliminate future annual interest payments.
The stock is being issued as a private placement.
In connection with the exchanges, the company is also entering into certain capped call early unwind agreements with counterparties to Arch Resources’ capped call transactions that were entered into in connection with the issuance of the notes exchanged.
It is expected that the capped call counterparties will settle the early unwinds by delivering to Arch Resources a number of shares of Arch Resources’ common stock corresponding to the consideration in respect of the early unwinds on or about May 26. In connection with such settlements, the capped call counterparties and/or their respective affiliates may buy shares of the Arch Resources’ common stock in secondary market transactions.
Arch Resources is a St. Louis-based mining company.
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