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Weatherford International Plc (NYSE:WFT) Stock Decline On News Of Convertible Debt Issues

The stock price of Weatherford International Plc (NYSE:WFT) declined more than 14% on Monday’s trading session, after the company reported the issue of concurrent underwritten public offerings of obligatory exchangeable subordinated notes and stocks for a combined amount of nearly $1.0 billion. The company confirmed that it plans to use the capital to pre-fund future acquisitions and to meet general corporate needs, including retiring debt. Wells Fargo and Citigroup are joint book runners for the reported offering.

The details

Weatherford reported the opening of concurrent underwritten public offerings of the “Shares” and “Notes” for a combined offering of $1 billion. The Company keeps the flexibility to change the relative proportions of the Shares and Notes offered in the Combined Offering. The Notes and Shares will be offered as per an effective registration statement submitted with the Securities and Exchange Commission.

Weatherford plans to use the funds from the combined offering to support potential acquisitions. Pending such use, it plans to reduce the borrowings under commercial paper program and revolving credit facility with the proceeds of offering.

The highlights

Weatherford stated that the Notes will come with a maturity period of three years and will be released at 100% of the principal. They will be essentially exchanged for the company’s ordinary shares at the maturity of the Notes unless previously converted at the choice of the Weatherford Bermuda or holders or upon certain mentioned events in agreement with the terms of the Notes. They will be unconditionally and fully guaranteed by the company on a subordinated, unsecured basis. The exchange rate, the interest rate, and other terms will be decided at the time of Notes offering pricing.

As per the reported terms, the lock-up period will be sixty days for the company on sale or issuances of ordinary shares of Weatherford International Plc (NYSE:WFT) and securities that offer the holder the right to buy ordinary shares of the company.

Published by Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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