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Fluence Energy, Inc. Announces Pricing of Upsized Offering of $350.0 Million of Convertible Notes and Capped Call Transactions

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Fluence Energy (FLNC) has announced the pricing of an upsized $350.0 million convertible senior notes offering due 2030, increased from the previously announced $300.0 million. The notes will carry a 2.25% interest rate, payable semi-annually, and will mature on June 15, 2030. The initial conversion price is set at $21.35 per share, representing a 30% premium over the last reported share price.

The company has entered into capped call transactions to offset potential dilution, with a cap price of $28.74 per share. The proceeds will be used for working capital needs, upgrading battery cell production lines from 305 amp hour to 530 amp hour cells, and general corporate purposes.

Fluence Energy (FLNC) ha annunciato la determinazione del prezzo di un'offerta aumentata di 350,0 milioni di dollari di obbligazioni convertibili senior con scadenza nel 2030, aumentate rispetto ai precedenti 300,0 milioni di dollari. Le obbligazioni porteranno un tasso di interesse del 2,25%, pagabile semestralmente, e scadranno il 15 giugno 2030. Il prezzo di conversione iniziale è fissato a 21,35 dollari per azione, che rappresenta un premio del 30% rispetto all'ultimo prezzo delle azioni riportato.

L'azienda ha avviato operazioni di capped call per compensare una potenziale diluizione, con un prezzo di cap di 28,74 dollari per azione. I proventi saranno utilizzati per le necessità di capitale circolante, per aggiornare le linee di produzione delle celle batteria da 305 ampere-ora a celle da 530 ampere-ora e per scopi aziendali generali.

Fluence Energy (FLNC) ha anunciado el precio de una oferta ampliada de 350,0 millones de dólares en notas convertibles senior con vencimiento en 2030, incrementadas desde los previamente anunciados 300,0 millones de dólares. Las notas tendrán una tasa de interés del 2,25%, pagadera semestralmente, y vencerán el 15 de junio de 2030. El precio de conversión inicial se establece en 21,35 dólares por acción, lo que representa una prima del 30% sobre el último precio de acción reportado.

La empresa ha ingresado en transacciones de capped call para compensar una posible dilución, con un precio tope de 28,74 dólares por acción. Los ingresos se utilizarán para necesidades de capital de trabajo, para mejorar las líneas de producción de celdas de batería de 305 amperios-hora a celdas de 530 amperios-hora y para fines corporativos generales.

플루언스 에너지 (FLNC)는 2030년 만기 convertible senior notes의 가격을 3억 5천만 달러로 증가시켰다고 발표했습니다. 이 금액은 이전에 발표된 3억 달러에서 증가된 것입니다. 이 notes는 2.25%의 이자율을 적용받으며, 반기마다 지급됩니다. 만기는 2030년 6월 15일입니다. 초기 전환 가격은 21.35달러로 설정되어 있으며, 이는 마지막 보고된 주가에 비해 30%의 프리미엄을 나타냅니다.

회사는 잠재적 희석을 상쇄하기 위해 capped call 거래에 들어갔으며, 주당 28.74달러의 상한 가격이 설정되어 있습니다. 수익금은 운영 자본 필요와 함께 배터리 셀 생산 라인을 305 암페어시에서 530 암페어시로 업그레이드하는 데 사용되며, 일반적인 기업 목적으로도 사용됩니다.

Fluence Energy (FLNC) a annoncé le prix d'une offre augmentée de 350 millions de dollars d'obligations convertibles senior arrivant à échéance en 2030, augmentée par rapport aux 300 millions de dollars précédemment annoncés. Les obligations auront un taux d'intérêt de 2,25%, payable semestriellement, et arriveront à échéance le 15 juin 2030. Le prix de conversion initial est fixé à 21,35 dollars par action, ce qui représente une prime de 30 % par rapport au dernier prix des actions rapporté.

L'entreprise a mis en place des transactions de capped call pour compenser une dilution potentielle, avec un prix de cap de 28,74 dollars par action. Les recettes seront utilisées pour les besoins en fonds de roulement, la mise à niveau des lignes de production de cellules de batterie de 305 ampères-heure à 530 ampères-heure, et des fins corporatives générales.

Fluence Energy (FLNC) hat die Preisgestaltung für ein erhöhtes Angebot von 350,0 Millionen Dollar an wandelbaren Senior-Anleihen mit Fälligkeit im Jahr 2030 bekannt gegeben, das von den zuvor angekündigten 300,0 Millionen Dollar aufgestockt wurde. Die Anleihen haben einen Zinssatz von 2,25%, der halbjährlich gezahlt wird, und laufen am 15. Juni 2030 aus. Der anfängliche Wandlungspreis beträgt 21,35 Dollar pro Aktie, was einen Aufschlag von 30 % auf den zuletzt gemeldeten Aktienpreis darstellt.

Das Unternehmen hat capped call-Transaktionen durchgeführt, um eine mögliche Verwässerung auszugleichen, mit einem Cap-Preis von 28,74 Dollar pro Aktie. Die Einnahmen werden für den Arbeitskapitalbedarf, zur Aufrüstung der Produktionslinien von Batteriezellen von 305 Amperestunden auf 530 Amperestunden und für allgemeine Unternehmenszwecke verwendet.

Positive
  • Successful upsizing of convertible note offering from $300M to $350M, indicating strong investor interest
  • Implementation of capped call transactions to minimize potential shareholder dilution
  • Planned upgrade of battery cell production line to higher capacity 530 amp hour cells
  • Low interest rate of 2.25% on the convertible notes
Negative
  • Potential dilution risk for shareholders if notes are converted to common stock
  • Increased debt obligation of $350M plus interest payments
  • Risk of mandatory repurchase if a 'fundamental change' occurs

Insights

The upsized $350M convertible notes offering with a 2.25% interest rate represents a strategic financial move for Fluence. The initial conversion price of $21.35 per share, set at a 30% premium and the capped call transactions with a $28.74 cap price demonstrate careful structuring to minimize potential dilution while securing necessary capital. The proceeds will be strategically allocated to working capital and upgrading battery cell production capacity from 305Ah to 530Ah cells, potentially boosting operational efficiency and market competitiveness. The capped call transactions effectively create a synthetic upper bond on dilution, protecting existing shareholders while providing flexibility for future growth.

This financing move comes at a important time in the energy storage market's evolution. The upgrade to 530Ah cells signals Fluence's commitment to maintaining technological competitiveness in the rapidly growing energy storage sector. The convertible note structure, with its 2.25% coupon rate, is relatively attractive in the current high-interest-rate environment and reflects market confidence in Fluence's business model. The 75% premium on the cap price suggests optimistic long-term growth expectations, while the conversion terms provide flexibility for both the company and investors.

ARLINGTON, Va., Dec. 10, 2024 (GLOBE NEWSWIRE) -- Fluence Energy, Inc. (Nasdaq: FLNC) (“Fluence” or the “Company”), a global market leader delivering intelligent energy storage, operational services, and asset optimization software, today announced that it has upsized and priced an offering of $350.0 million aggregate principal amount of 2.25% convertible senior notes due 2030 (the “Notes”). The offering size was increased from the previously announced offering size of $300.0 million aggregate principal amount of Notes. The issuance and sale of the Notes are scheduled to settle on December 12, 2024, subject to customary closing conditions. Fluence also granted the initial purchasers of the Notes an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes are first issued, up to an additional $50.0 million aggregate principal amount of the Notes. The Notes are being offered in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act.

The Notes will be senior, unsecured obligations of Fluence, will accrue interest payable semi-annually in arrears and will mature on June 15, 2030, unless earlier repurchased, redeemed or converted. Before March 15, 2030, noteholders will have the right to convert their Notes in certain circumstances and specified periods. From and after March 15, 2030, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Fluence will settle conversions by paying or delivering, as applicable, cash, shares of its Class A common stock (“Class A common stock”) or a combination of cash and shares of its Class A common stock, at Fluence’s election. The initial conversion rate is 46.8472 shares of Class A common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $21.35 per share of Class A common stock and approximately a 30% premium to the last reported sale price per share of the Company's Class A common stock on December 10, 2024.The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.

In connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions (the “capped call transactions”) with certain of the initial purchasers and/or their respective affiliates and other financial institutions (the “counterparties”). The capped call transactions will cover, subject to customary adjustments, the number of shares of the Company’s Class A common stock that will initially underlie the Notes. The cap price of the capped call transactions will initially be approximately $28.74 per share, which represents a premium of approximately 75% over the last reported sale price per share of the Company’s Class A common stock on December 10, 2024, and is subject to customary adjustments under the terms of the capped call transactions.

The capped call transactions are generally expected to offset the potential dilution to the Class A common stock and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, with such offset subject to a cap, as the case may be, as a result of any conversion of the Notes. If the initial purchasers exercise their option to purchase additional Notes, the Company expects to enter into additional capped call transactions with the counterparties.

The Notes will be redeemable, in whole or in part (subject to certain partial redemption limitations), for cash at Fluence’s option at any time, and from time to time, on or after December 20, 2027 and on or before the 50th scheduled trading day immediately before the maturity date, but only if (i) the Notes are “freely tradable”, and all accrued and unpaid additional interest, if any, has been paid in full, as of the date of the related redemption notice, and (ii) the last reported sale price per share of Fluence’s Class A common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If certain events that constitute a “fundamental change” occur, then, subject to a limited exception, noteholders may require Fluence to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

In connection with establishing their initial hedge of these capped call transactions, the Company has been advised that the counterparties (i) may enter into various over-the-counter cash-settled derivative transactions with respect to the Class A common stock and/or purchase the Class A common stock in secondary market transactions concurrently with, or shortly after, the pricing of the Notes; and (ii) may enter into or unwind various over-the-counter derivatives and/or purchase the Class A common stock in secondary market transactions following the pricing of the Notes. These activities could have the effect of increasing or preventing a decline in the price of the Class A common stock concurrently with or following the pricing of the Notes and under certain circumstances, could affect the ability to convert the Notes.

In addition, the counterparties may modify or unwind their hedge positions by entering into or unwinding various derivative transactions and/or purchasing or selling the Class A common stock or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to maturity of the Notes (and are likely to do so (x) during any observation period related to a conversion of the Notes or following any redemption or fundamental change repurchase of the Notes, (y) following any other repurchase of the Notes if the Company unwinds a corresponding portion of the capped call transactions in connection with such repurchase and (z) if the Company otherwise unwinds all or a portion of the capped call transactions). The effect, if any, of these transactions and activities on the market price of the Class A common stock or the Notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of the Class A common stock and the value of the Notes, and potentially the value of the consideration that a noteholder will receive upon the conversion of the Notes and could affect a noteholder’s ability to convert the Notes.

Fluence intends to utilize the net proceeds of the offering for working capital needs, upgrading one of our battery cell production lines from 305 amp hour cells to 530 amp hour cells, and general corporate purposes. Fluence intends to transfer the remaining net proceeds of this offering directly to purchase an intercompany subordinated convertible promissory note issued by Fluence Energy, LLC, the proceeds of which Fluence Energy, LLC intends to use for general corporate purposes.

The offer and sale of the Notes and any shares of Class A common stock issuable upon conversion of the Notes have not been, and will not, be registered under the Securities Act or any other securities laws, and the Notes and any such shares cannot be offered or sold except to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, the Notes or any shares of Class A common stock issuable upon conversion of the Notes, nor shall there be any sale of the Notes or any such shares, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers of the Notes will be made only by means of a private offering memorandum.

There can be no assurances that the offering of the Notes will be completed as described herein or at all.

About Fluence:

Fluence Energy, Inc. (Nasdaq: FLNC) is a global market leader delivering intelligent energy storage and optimization software for renewables and storage. The Company's solutions and operational services are helping to create a more resilient grid and unlock the full potential of renewable portfolios. With gigawatts of projects successfully contracted, deployed and under management across nearly 50 markets, the Company is transforming the way we power our world for a more sustainable future.

Cautionary Note Regarding Forward-Looking Statements

The statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In particular, statements regarding our future results of operations and financial position, operational performance, anticipated growth and business strategy, future revenue recognition and estimated revenues, future capital expenditures and debt service obligations, projected costs, prospects, plans, and objectives of management for future operations, including, among others, statements regarding expected growth and demand for our energy storage solutions, services, and digital application offerings, relationships with new and existing customers and suppliers, introduction of new energy storage solutions, services, and digital application offerings and adoption of such offerings by customers, assumptions relating to the Company’s tax receivable agreement, expectations relating to backlog, pipeline, and contracted backlog, current expectations relating to legal proceedings, and anticipated impact and benefits from the Inflation Reduction Act of 2022 and related domestic content guidelines on us and our customers as well as any other proposed or recently enacted legislation, are forward-looking statements. In some cases, you may identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “grows,” “believes,” “estimates,” “predicts,” “potential”, “commits”, or “continue” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Among those risks and uncertainties are market conditions and the consummation of the offering of the Notes and the consummation of the capped calls transactions Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

These forward-looking statements are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, our relatively limited operating and revenue history as an independent entity and the nascent clean energy industry; anticipated increasing expenses in the future and our ability to maintain prolonged profitability; fluctuations of our order intake and results of operations across fiscal periods; potential difficulties in maintaining manufacturing capacity and establishing expected mass manufacturing capacity in the future; risks relating to delays, disruptions, and quality control problems in our manufacturing operations; risks relating to quality and quantity of components provided by suppliers; risks relating to our status as a relatively low-volume purchaser as well as from supplier concentration and limited supplier capacity; risks relating to operating as a global company with a global supply chain; changes in the cost and availability of raw materials and underlying components; failure by manufacturers, vendors, and suppliers to use ethical business practices and comply with applicable laws and regulations; significant reduction in pricing or order volume or loss of one or more of our significant customers or their inability to perform under their contracts; risks relating to competition for our offerings and our ability to attract new customers and retain existing customers; ability to maintain and enhance our reputation and brand recognition; ability to effectively manage our recent and future growth and expansion of our business and operations; our growth depends in part on the success of our relationships with third parties; ability to attract and retain highly qualified personnel; risks associated with engineering and construction, utility interconnection, commissioning and installation of our energy storage solutions and products, cost overruns, and delays; risks relating to lengthy sales and installation cycle for our energy storage solutions; risks related to defects, errors, vulnerabilities and/or bugs in our products and technology; risks relating to estimation uncertainty related to our product warranties; fluctuations in currency exchange rates; risks related to our current and planned foreign operations; amounts included in our pipeline and contracted backlog may not result in actual revenue or translate into profits; risks related to acquisitions we have made or that we may pursue; events and incidents relating to storage, delivery, installation, operation, maintenance and shutdowns of our products; risks relating to our impacts to our customer relationships due to events and incidents during the project lifecycle of an energy storage solution; actual or threatened health epidemics, pandemics or similar public health threats; ability to obtain financial assurances for our projects; risks relating to whether renewable energy technologies are suitable for widespread adoption or if sufficient demand for our offerings do not develop or takes longer to develop than we anticipate; estimates on size of our total addressable market; barriers arising from current electric utility industry policies and regulations and any subsequent changes; risks relating to the cost of electricity available from alternative sources; macroeconomic uncertainty and market conditions; risk relating to interest rates or a reduction in the availability of tax equity or project debt capital in the global financial markets and corresponding effects on customers’ ability to finance energy storage systems and demand for our energy storage solutions; reduction, elimination, or expiration of government incentives or regulations regarding renewable energy; decline in public acceptance of renewable energy, or delay, prevent, or increase in the cost of customer projects; severe weather events; increased attention to ESG matters; restrictions set forth in our current credit agreement and future debt agreements; uncertain ability to raise additional capital to execute on business opportunities; ability to obtain, maintain and enforce proper protection for our intellectual property, including our technology; threat of lawsuits by third parties alleging intellectual property violations; adequate protection for our trademarks and trade names; ability to enforce our intellectual property rights; risks relating to our patent portfolio; ability to effectively protect data integrity of our technology infrastructure and other business systems; use of open-source software; failure to comply with third party license or technology agreements; inability to license rights to use technologies on reasonable terms; risks relating to compromises, interruptions, or shutdowns of our systems; changes in the global trade environment; potential changes in tax laws or regulations; risks relating to environmental, health, and safety laws and potential obligations, liabilities and costs thereunder; failure to comply with data privacy and data security laws, regulations and industry standards; risks relating to potential future legal proceedings, regulatory disputes, and governmental inquiries; risks related to ownership of our Class A common stock; risks related to us being a “controlled company” within the meaning of the NASDAQ rules; risks relating to the terms of our amended and restated certificate of incorporation and amended and restated bylaws; risks relating to our relationship with our Founders and Continuing Equity Owners; risks relating to conflicts of interest by our officers and directors due to positions with Continuing Equity Owners; risks related to short-seller activists; we depend on distributions from Fluence Energy, LLC to pay our taxes and expenses and Fluence Energy, LLC’s ability to make such distributions may be limited or restricted in certain scenarios; risks arising out of the Tax Receivable Agreement; unanticipated changes in effective tax rates or adverse outcomes resulting from examination of tax returns; risks relating to improper and ineffective internal control over reporting to comply with Sarbanes-Oxley Act; risks relating to changes in accounting principles or their applicability to us; risks relating to estimates or judgments relating to our critical accounting policies; and the factors described under the headings Part I, Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Many of the important factors that will determine these results are beyond our ability to control or predict. Accordingly, you should not place undue reliance on any such forward-looking statements. We qualify all forward-looking statements contained in this press release by these cautionary statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.


FAQ

What is the size and interest rate of Fluence Energy's (FLNC) new convertible notes offering?

Fluence Energy's convertible notes offering is $350.0 million with a 2.25% interest rate, upsized from the initially announced $300.0 million.

When do Fluence Energy's (FLNC) new convertible notes mature?

The convertible notes will mature on June 15, 2030, unless earlier repurchased, redeemed, or converted.

What is the initial conversion price for FLNC's 2030 convertible notes?

The initial conversion price is $21.35 per share, representing a 30% premium over the last reported share price on December 10, 2024.

How will FLNC use the proceeds from the convertible notes offering?

The proceeds will be used for working capital needs, upgrading battery cell production lines from 305 amp hour to 530 amp hour cells, and general corporate purposes.

What measures has FLNC taken to protect shareholders from dilution?

FLNC has entered into capped call transactions with a cap price of $28.74 per share to offset potential dilution from the convertible notes.

Fluence Energy, Inc.

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