By Chris Wack
Vertex Energy Inc. shares were down 18% to $4.38 Tuesday after the company said it intends to offer $155 million of its convertible senior notes due 2027 in a private offering.
The company said the notes will be senior unsecured obligations, will be issued at a price equal to 90% of the face amount of each note and will accrue interest payable semiannually in arrears.
The notes will be convertible into cash, shares of common stock or a combination of cash and shares of stock at the company's election. The interest rate, initial conversion rate, redemption rights and other terms of the notes will be determined at the time of pricing of the offering.
Vertex said it intends to use $33.7 million of the proceeds to fund a portion of the funds payable in connection with the previously disclosed, pending acquisition by Vertex Energy of a refinery located in Mobile, Ala.. It said it plans to use $13 million for certain engineering services and for the initial payments of purchase orders for long lead-time equipment associated with a capital project designed to modify the Mobile refinery's hydrocracking unit to produce renewable diesel in advance of the purchase, and $10.9 million to repay amounts owed by the company under its credit facilities with Encina Business Credit LLC and certain of its affiliates. It said it plans to use $400,000 to repay certain secured equipment leases with certain affiliates of Wells Fargo Bank.
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(END) Dow Jones Newswires