HMAR's Preferred Securities:
On June 24, 1997, the Company completed a private offering (the "Private Offering") of 2,300,000, 6 1/2% Trust Convertible Preferred Securities (the "Preferred Securities"). The Preferred Securities were issued by Hvide Capital Trust (the "Trust"), a 100%-owned subsidiary of the Company. The Trust exists for the sole purpose of issuing the Preferred Securities and investing the proceeds from the issuance thereof in 6 1/2% Convertible Subordinated Debentures due June 15, 2012 (the "Debentures") issued by the Company. The net proceeds to the Company were $111,550,000 after deducting underwriting commissions. Of such amount, approximately $94.2 million was used to repay principal and interest outstanding under the Company's credit agreement (the "Credit Facility"), and $6.0 million was used to repay other indebtedness. The remaining $11.4 million was available for general corporate purposes.
Holders of the Preferred Securities are entitled to receive preferential cumulative cash distribution from the Trust at an annual rate of 6 1/2% of the liquidation preference of $50 per Preferred Security accruing from the date of the original issuance of the Preferred Securities and payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on October 1, 1997. The distribution rate and the distribution and other payment dates for the Preferred Securities correspond to the interest rate and interest and other payment dates for the Debentures, which are the sole assets of the Trust.
The Preferred Securities are convertible, beginning September 25, 1997 and prior to the maturity date of the Debentures or, in the case of Preferred Securities called for redemption, prior to the close of business on the business day prior to the redemption date, at the option of the holder into shares of Hvide Class A Common Stock at the rate of 1.7544 shares of Hvide Class A Common Stock for each Preferred Security (equivalent to a conversion price of $28.50 per share of Hvide Class A Common Stock), subject to adjustment in certain circumstances. |
