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DALLAS - enCore Energy Corp. (NASDAQ:EU) (TSXV:EU), currently valued at $481.71 million, announced Tuesday its intention to offer $75 million in convertible senior notes due 2030 to qualified institutional buyers under Rule 144A of the Securities Act. According to InvestingPro data, the company maintains a strong liquidity position with more cash than debt on its balance sheet.
The company plans to grant initial purchasers a 13-day option to buy up to an additional $11.25 million in notes. The convertible notes will be senior unsecured obligations maturing on August 15, 2030, with interest payable semi-annually. The company’s solid financial position is reflected in its current ratio of 2.53, indicating strong ability to meet short-term obligations.
According to the announcement, enCore may redeem the notes for cash after August 21, 2028, if the company’s share price exceeds 130% of the conversion price for a specified period. The interest rate and initial conversion rate will be determined at pricing.
The uranium company intends to use part of the proceeds to enter into capped call transactions, which are expected to reduce potential dilution to common shares upon conversion. The remainder will go toward repaying outstanding loan amounts and general corporate purposes.
These capped call transactions will be privately negotiated with financial institutions and are expected to cover the number of common shares initially underlying the convertible notes, subject to anti-dilution adjustments.
The notes will only be offered to qualified institutional buyers and have not been registered under the Securities Act or any state securities laws, making them subject to applicable exemptions from registration requirements.
enCore Energy describes itself as a U.S. uranium company with multiple Central Processing Plants in operation, utilizing in-situ recovery (ISR) for uranium extraction. With a conservative debt-to-equity ratio of 0.04 and analyst price targets ranging from $3.23 to $4.97, InvestingPro analysis suggests the stock may be undervalued at current levels. Subscribers can access 8 additional exclusive ProTips and comprehensive financial metrics to better evaluate this investment opportunity.
The information in this article is based on a company press release statement.
In other recent news, enCore Energy Corp. announced the acquisition of a 5,900-acre land parcel adjacent to its Alta Mesa Uranium Project in Texas. This acquisition is part of a joint venture with Boss Energy Ltd. and aims to potentially extend the operational life of the uranium processing facility. Additionally, the company has promoted Dain McCoig to Chief Operating Officer following a significant increase in uranium production at the Alta Mesa facility. The facility’s uranium extraction rates have more than doubled since McCoig began leading the operations team earlier this year.
In corporate governance updates, enCore Energy held its Annual General Meeting where shareholders approved the proposed slate of directors and executive pay. Furthermore, enCore Energy has secured a license extension from the Texas Commission on Environmental Quality for its Upper Spring Creek In-Situ Recovery Uranium Project. This approval allows for the commencement of wellfield construction and a Satellite Ion Exchange Plant to support the Rosita Central Processing Plant. The company expressed confidence in the timely construction of the new facility, emphasizing the project’s significance to its operations.
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