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Flextronics sets Friday launch for $2.5 billion unsecured term loan
By Sara Rosenberg
New York, Sept. 19 - Flextronics International Ltd. is scheduled to hold a bank meeting on Friday at 9:30 a.m. ET at the InterContinental in New York to launch its proposed $2.5 billion seven-year senior unsecured term loan (Ba1/BB+), according to a market source.
Citigroup is the lead bank on the deal.
Back in July, the company said in a filing with the Securities and Exchange Commission that the loan is expected to carry pricing of Libor plus 200 basis points; however, official price talk has yet to emerge.
Proceeds will be used to help fund the acquisition of Solectron Corp. for $3.6 billion.
Under the acquisition agreement, each share of common stock of Solectron will be converted into the right to receive, at the election of each of the individual holders of Solectron shares, either, but not a combination of, 0.3450 shares of Flextronics or a cash payment of $3.89 per share, subject to the limitation that not more than 70% and no less than 50% of Solectron shares will be converted into shares of Flextronics.
The cash payment can range from around $1.06 billion to around $1.77 billion.
In addition to funding the cash payment, proceeds from the term loan will be used to refinance Solectron's debt, if required.
Flextronics is a Singapore-based electronics manufacturing services provider. Solectron is a Milpitas, Calif.-based provider of complete product lifecycle services.
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