Titan International has announced the conversion of 97.1 per cent of the principal balance of its 5.625 per cent convertible senior subordinated notes (Notes), which matured on 15 January 2017. Prior to maturity, US$60,161,000 in aggregate principal amount of the Notes was outstanding, of which, holders of $58,460,000 in aggregate principal amount of the Notes, or 97.1 per cent, converted their notes into shares of Titan common stock pursuant to the terms of the indenture governing the Notes.
After giving effect to the conversion and maturity of the Notes, Titan’s $400,000,000 senior secured notes due in 2020 are its only US senior notes outstanding. The $58,460,000 principal amount of converted Notes was converted into 5,462,264 shares of Titan common stock, representing approximately ten per cent of Titan’s outstanding common stock prior to conversion. Each $1,000 principal amount of the Notes was convertible into 93.436 shares of Titan common stock. The remaining $1,701,000 principal amount of the Notes not converted was paid in cash.
The initial base conversion rate for the Notes was 93.0016 shares of Titan common stock per $1,000 principal amount of the Notes, equivalent to an initial base conversion price of approximately $10.75 per share of Titan common stock. The base conversion rate was increased by 0.4344 shares as determined pursuant to a formula described within the indenture governing the Notes.
“We believe this is a win-win for Titan and our new shareholders,” stated Paul Reitz, Titan president and chief executive officer. “We’re pleased these convertible debt holders have chosen to become shareholders of Titan. We believe that the debt reduction and minimal cash outlay will further strengthen our capital position moving forward.”
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