Deal sells 10% convertibles and warrants for about 47.4 million shares
By Devika Patel
Knoxville, Tenn., Dec. 4 - Prospect Global Resources Inc. said it signed definitive commitments for its previously announced $100 million private placement of 10% seven-year convertible springing second-lien notes on Nov. 29, according to an 8-K filed Tuesday with the Securities and Exchange Commission. The financing is conditional upon the company completing a bankable feasibility study that satisfies certain conditions.
The note is initially convertible into common stock at $2.70 per share. The conversion price is a 77.63% premium to the Nov. 28 closing share price of $1.52.
The investors also received warrants for about 25.9 million shares, which are each exercisable at $2.70, and warrants for about 21.5 million shares, which are each exercisable at $3.25, a 113.82% premium to the Nov. 28 closing share price.
The investors were investment funds managed by Apollo Global Management, LLC. The second-lien security that will be granted to the investors consists of the assets the company pledged to Karlsson Group in connection with the issuance of Karlsson Group's promissory note.
Proceeds will be used to continue development of the Holbrook Project, including repayment of the promissory note held by Karlsson Group.
Based in Denver, Prospect Global is a resource exploration company.
| Issuer: | Prospect Global Resources Inc.
|
| Issue: | Convertible springing second-lien notes
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| Amount: | $100 million
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| Maturity: | Seven years
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| Coupon: | 10%
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| Conversion price: | $2.70
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| Warrants: | For about 47.4 million shares
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| Warrant strike prices: | $2.70 (for about 25.9 million shares), $3.25 (for about 21.5 million shares)
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| Investor: | Apollo Global Management, LLC
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| Pricing date: | Nov. 29
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| Stock symbol: | Nasdaq: PGRX
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| Stock price: | $1.52 at close Nov. 28
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| Market capitalization: | $120.21 million
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