By Sheri Kasprzak
Atlanta, March 21 - Verilink Corp. said it has raised $10 million in a private placement of convertible debentures.
The debentures bear interest at 6% annually, mature in three years and are convertible into common shares at $3.01 each, a 15% premium to the company's closing price March 18.
Verilink may force the conversion of the debentures if its closing stock price exceeds 200% of the conversion price for 20 consecutive trading days.
The offering includes additional investment rights for up to $5 million in debentures.
The investors will also receive warrants for 830,567 shares at $3.41 each for five years. The warrants become exercisable six months after the deal closes.
Kaufman Bros. LP was the placement agent.
Verilink, based in Centennial, Colo., is a broadband access company. It plans to use the proceeds from the deal to repay a $3.5 million revolving line of credit with RBC Centura Bank. The remainder will be used for working capital and general corporate purposes.
| Issuer: | Verilink Corp.
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| Issue: | Convertible debentures
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| Amount: | $10 million
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| Maturity: | Three years
|
| Coupon: | 6%
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| Price: | Par
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| Yield: | 6%
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| Conversion price: | $3.01
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| Call: | May force conversion if stock price exceeds 200% of the conversion price for 20 consecutive days
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| Warrants: | For 830,567 shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $3.41
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| Placement agent: | Kaufman Bros. LP
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| Settlement date: | March 21
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| Stock price: | $2.62 at close March 18
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