Palm Issues $50 Million Convertible Note
New Capital Strengthens Balance Sheet
SANTA CLARA, Calif., Dec. 7 /PRNewswire/ -- Palm, Inc. (NASDAQ:PALM), a
leading provider of handheld computers, today announced it has issued a
$50 million convertible note to an investor it did not identify. Palm will
use the funds to strengthen its balance sheet and to support wireless and
enterprise initiatives.
"This capital commitment demonstrates a high level of external confidence
in Palm," said Eric Benhamou, Palm chairman of the board and chief executive
officer.
The note has a 5-year term, a 5.0 percent coupon rate, and is convertible
into Palm common stock at $4.63 per share, which represents 130 percent of the
weighted average price of Palm's common stock for the five days prior to
closing. Palm may force a conversion at any time beyond one year of the
closing, provided Palm's common stock has traded above $7.13 per share for a
defined period of time.
"We're moving ahead on our strategic objectives -- returning to
profitability, executing on our enterprise strategy and delivering an ARM-
based set of solutions to the marketplace," Benhamou said.
Palm and its new management team have made substantial progress
re-engineering business operations and reducing costs. The company is focused
on the development of new wireless solutions, many of which will be targeted
at large enterprises, and is proceeding with the separation of its platform
and solutions businesses. By the end of calendar year 2001, Palm's Platform
Solutions Group, which develops and licenses the Palm operating system, is
expected to become a separate internal subsidiary of Palm, Inc. The
separation will increase focus and drive innovation in the platform business
as well as its sister business, the Solutions Group. |
