HC2 Holdings Inc. (HCHC) recently announced a rights offering for its common stock. The company’s Board of Directors approved launching of rights offering worth $65 million. The company applied for registration of the same at the Securities and Exchange Commission (“SEC”) by filing its statement on Form S-3. HC2 is expecting launching rights offering after a go ahead by SEC and that too will be subject to final approval of it by the Board.
Stockholders currently in possession of company’s stock could participate in the offering and are eligible to basic subscription. That will be equivalent to proportion amount of their existing ownership and will be replaced with newly issues common stock. Stockholders exercising full basic subscription rights will be qualified for over-subscription privileges. They will be available with option of subscribing to any common stock shares which left behind unsubscribed at expiry of the offering period.
In case total of basic subscriptions and over-subscriptions aggregates to exceed the offered amount, then over subscription will be pro-rated among stockholders. The stockholders will only be those exercising their oversubscription. The over-subscription will be pro-rated among them on the basis of their respective basic subscription.
Lancer Capital LLC will participate as a partial backstop in rights offering by HC2. Company’s Chairman of the Board, Avram Glazer has been is not only leading that investment fund but is also the largest stockholder of HCHC.
Lancer Capital, as already agreed with the company, will exercise its basic subscription amount. It will also participate in the oversubscription privileges but not to an amount exceeding $35 million. And that will include amount of its basic subscription.
The company is likely to paying $2.27 for a whole common stock transferable subscription right to stockholders purchasing shares of the Company’s common stock. The company is intending utilizing the proceeds from the rights offering for general corporate expenses.