I saw this PR prior to market open this morning...
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Cell Therapeutics, Inc. Announces $82 Million in Convertible Senior Notes Offering
prnews
SEATTLE, Nov. 1 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. (CTI)
(Nasdaq: CTIC; MTAX) today entered into an agreement to issue $82 million of
6.75% convertible senior notes ("Notes") due in 2010 only to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933,
as amended (the "Notes Agreement").
The Notes will bear interest at a rate of 6.75% per annum and will be
convertible for shares of CTI common stock at the rate of 378.78 shares per
$1,000 principal amount of Notes, which is equivalent to an initial conversion
price of approximately $2.63 per share, which is equal to 110% of the closing
bid price on October 31, 2005. The Notes will rank pari passu in right of
payment with all existing and future senior indebtedness of CTI, and will rank
senior in right of payment to CTI's currently outstanding convertible notes.
Holders of the Notes would also have the right to cause CTI to redeem up to
30% of the aggregate principal amount of the Notes (or approximately $24.6
million) on a pro rata basis on April 30, 2006, and any such redemption would
exclude any accrued and unpaid interest. The Notes Agreement is expected to
close by November 4, 2005, subject to closing conditions, including the
condition that the prospective investors have not withdrawn their commitment
to purchase the Notes. CTI cannot provide any assurance regarding the amount
of Notes to be issued, if any, until the Notes Agreement is closed.
CTI also announced today that it has entered into a Conversion and
Placement Agreement ("CAP Agreement") with two qualified institutional buyers
who are existing holders (the "CAP Holders") of an aggregate amount of
approximately $38.38 million of its outstanding 5.75% Convertible Senior
Subordinated Notes due June 15, 2008 ("5.75% Notes") and 4% Convertible Senior
Subordinated Notes due July 1, 2010 ("4% Notes"). Pursuant to the terms of the
CAP Agreement, the CAP Holders have agreed to exercise their right to convert
their 5.75% Notes and 4% Notes into approximately 3.3 million shares of CTI
common stock. In consideration for the CAP Holders exercising their conversion
rights, CTI has agreed to issue to the CAP Holders approximately 9.9 million
shares of its common stock. The CAP Holders have agreed to be investors in the
above described Notes Agreement. The closing of the CAP Agreement is expected
to coincide with, and is conditioned upon, the closing of the Notes Agreement.
These securities have not been registered under the Securities Act of
1933, as amended, or any state securities laws. The Notes, the common stock
issuable upon conversion of the Notes and the common stock CTI has agreed to
issue to the CAP Holders in consideration for the exercising of their
conversion rights under the 4% Notes and 5.75% Notes may not be offered or
sold in the United States absent registration or an applicable exemption from
the registration requirements of the Securities Act of 1933, as amended, and
any applicable state laws.
This announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities. No offer, solicitation or sale will be
made in any jurisdiction in which such offer, solicitation or sale is
unlawful.
For more information, refer to the following table detailing certain
transaction data.
Certain Transaction Data
Retirement of $38.4 million of existing convertible debt
Annual Aggregate Maturity Conversion Shares to New
coupon amount of date price per be issued issued
old debt share upon restricted
being conversion shares
retired
5.75% $18.53
million 2008 $10.00 1,853,000
4.00% $19.85
million 2010 $13.50 1,470,371
Total $38.38
million 3,323,371 9,877,932
Issuance of $82.0 million of new convertible debt
Annual Aggregate amount Maturity Conversion Shares issuable
coupon of new debt date price per upon conversion
share
6.75% $82.0 million (1) 2010 $2.63 31,178,707
(1) $24.6 million of this debt is subject to mandatory redemption by the
Company on April 30, 2006 at the option of the holders. Any such mandatory
redemption will exclude accrued and unpaid interest.
This press release includes forward-looking statements that involve a
number of risks and uncertainties, the outcome of which could materially
and/or adversely affect actual future results. The risks and uncertainties
include the risk that the above described transaction will not close as a
result of the failure to meet closing conditions, investors may breach or
withdraw their commitment, and until closed there is no assurance that it will
close or what the total amount may be, and other risk factors listed or
described from time to time in the Company's filings with the Securities and
Exchange Commission including, without limitation, the Company's most recent
filings on Forms 10-K, 8-K, and 10-Q. CTI is under no obligation to (and
expressly disclaims any such obligation to) update or alter its forward-
looking statements whether as a result of new information, future events, or
otherwise.
SOURCE Cell Therapeutics, Inc. |
