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Investing.com -- AST SpaceMobile (NASDAQ:ASTS) stock fell 7.75% after the space-based cellular broadband network company announced the pricing of a repurchase of $225 million of its convertible notes and a registered direct offering of common stock to fund the repurchase.
The company will repurchase $225 million aggregate principal amount of its 4.25% convertible notes due 2032 through privately negotiated transactions with a limited number of note holders. To fund this repurchase, AST SpaceMobile is conducting a registered direct offering of 9,450,268 shares of its Class A common stock at $53.22 per share to the same note holders participating in the repurchase.
According to the company, these transactions will remove approximately 8.3 million underlying shares associated with the convertible notes while eliminating approximately $63.8 million in remaining interest payments. After the repurchase, $235 million aggregate principal amount of the 2032 convertible notes will remain outstanding.
"We are excited to retire approximately half of our 2032 convertible notes and the underlying shares at a price attractive to our shareholders in a series of innovative transactions. These transactions allow us to substantially reduce our outstanding debt and cash interest obligations," said Scott Wisniewski, AST SpaceMobile President.
The company noted that the previously purchased capped call will remain outstanding and is expected to reduce dilution upon any future conversion of the remaining notes. Both the repurchase and the registered direct offering are expected to close on or about July 1, 2025, with the transactions being cross-conditional.
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