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ModusLink Global Solutions, Inc. Message Board

  • spook2b spook2b Jun 9, 2014 6:54 PM Flag

    The $100M convert issue & NOLs

    5.25% Convertible Senior Notes

    On March 18, 2014, the Company entered into an indenture .. with Wells Fargo Bank, N.A., as trustee, relating to the Company’s issuance of $100 million of 5.25% Convertible Senior Notes. The Notes bear interest at the rate of 5.25% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2014. The Notes will mature on March 1, 2019 unless earlier repurchased by the Company or converted by the holder in accordance with their terms prior to such maturity date.

    The Company’s decision to issue the Notes resulted from a deliberative process that considered many factors. The timing of the Notes issuance was determined in part by what the Company was advised and believed to be favorable market conditions. As noted in the Company’s prior public filings, the Company intends to use the net proceeds from the issuance of the Notes for general corporate purposes, which may include potential acquisitions and other strategic business opportunities. The Company believes that the issuance of the Notes provides greater financial flexibility to the Company may enhance our ability to consummate one or several larger and/or more attractive acquisitions and should provide our customers and/or potential customers with greater confidence in the Company’s liquidity.

    The Company believes that the consummation of one or more successful acquisitions may result in the utilization over time of a material portion of the Company’s tax net operating loss carry forward (“NOLs”) and generate additional shareholder value. At July 31, 2013, the Company’s federal, state and foreign NOLs totaled approximately $2.0 billion, $450.9 million and $60.1 million, respectively.
    =========================
    Again, assuming they can make successful acquisitions, using the NOLs should result in a higher price per share for MLNK. They are showing $170.5M cash on the balance sheet...

 
MLNK
3.27+0.04(+1.24%)Oct 24 4:00 PMEDT

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