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Investing.com -- BlackSky Technology Inc. (NYSE:BKSY) stock plunged over 20% in after-hours trading Thursday after the company announced plans for a private offering of $125 million in convertible senior notes due 2033.
The geospatial intelligence company said the notes would be offered to qualified institutional buyers under Rule 144A of the Securities Act. BlackSky also plans to grant initial purchasers an option to buy up to an additional $18.75 million in notes during a 13-day period following issuance.
According to the announcement, BlackSky intends to use approximately $103.1 million of the proceeds to repay outstanding borrowings and terminate its secured term loan facility. An additional $10.2 million will go toward repaying and terminating its secured revolving credit facility. The remainder will fund general corporate purposes, including working capital, operating expenses, capital expenditures, and potential strategic investments.
The notes will be unsecured obligations of BlackSky with semiannual interest payments. Upon conversion, the company may settle in cash, shares of its Class A common stock, or a combination of both, at its discretion. The specific interest rate, conversion rate, and other terms will be determined when the offering is priced.
Neither the notes nor any shares potentially issuable upon conversion have been registered under the Securities Act, limiting their sale to qualified buyers or through exemptions from registration requirements.
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