IREN announces proposed convertible notes offering
IREN announces its plan to offer $300 million in convertible senior notes due 2030, with an additional $45 million option for initial purchasers. The notes will be senior, unsecured obligations with semi-annual interest payments, convertible to cash, ordinary shares, or a combination. The company plans to use proceeds for capped call transactions, prepaid forward transaction, and general corporate purposes.
The company will enter into capped call transactions to reduce potential dilution and offset potential cash payments beyond principal amount. Additionally, IREN will enter a prepaid forward share purchase transaction for up to $100 million of its ordinary shares, settling near the notes' maturity date.
IREN annuncia il suo piano di offrire 300 milioni di dollari in note senior convertibili con scadenza nel 2030, con un'opzione aggiuntiva di 45 milioni di dollari per i compratori iniziali. Le note saranno obbligazioni senior non garantite con pagamenti di interessi semestrali, convertibili in contante, azioni ordinarie, o una combinazione di entrambi. L'azienda prevede di utilizzare i proventi per transazioni di capped call, una transazione di acquisto anticipato e per scopi aziendali generali.
L'azienda intraprenderà transazioni di capped call per ridurre la potenziale diluizione e compensare i pagamenti in contante oltre l'importo principale. Inoltre, IREN farà un'operazione di acquisto di azioni ordinarie prepagate fino a 100 milioni di dollari, che si concluderà vicino alla data di scadenza delle note.
IREN anuncia su plan para ofrecer 300 millones de dólares en notas senior convertibles con vencimiento en 2030, con una opción adicional de 45 millones de dólares para los compradores iniciales. Las notas serán obligaciones senior no garantizadas con pagos semestrales de intereses, convertibles en efectivo, acciones ordinarias o una combinación de ambas. La empresa planea utilizar los fondos para transacciones de capped call, una transacción de compra anticipada y para fines corporativos generales.
La empresa llevará a cabo transacciones de capped call para reducir la posible dilución y compensar los posibles pagos en efectivo más allá del monto principal. Además, IREN entrará en una transacción de compra de acciones ordinarias prepagadas por hasta 100 millones de dólares, que se liquidará cerca de la fecha de vencimiento de las notas.
IREN은 2030년에 만기가 도래하는 3억 달러 규모의 전환 우선채권을 발행할 계획을 발표했으며, 초기 구매자에게는 추가로 4천 5백만 달러의 옵션이 제공됩니다. 이 채권은 반기 이자 지급이 있는 채권으로, 현금, 보통주 또는 이를 조합하여 전환할 수 있는 비담보 상환금입니다. 회사는 수익금을 capped call 거래, 선불 선매 거래 및 일반 회사 용도로 사용할 계획입니다.
회사는 잠재적인 희석을 줄이고 원금 이상의 현금 지불 가능성을 상쇄하기 위해 capped call 거래를 진행할 것입니다. 또한 IREN은 1억 달러까지의 자사 보통주를 위한 선불 선매 거래를 진행할 예정이며, 이는 채권 만기일 근처에 결제됩니다.
IREN annonce son intention d'offrir 300 millions de dollars d'obligations convertibles seniors arrivant à échéance en 2030, avec une option supplémentaire de 45 millions de dollars pour les acheteurs initiaux. Les obligations seront des engagements seniors non garantis avec des paiements d'intérêts semestriels, convertibles en espèces, en actions ordinaires ou en une combinaison des deux. L'entreprise prévoit d'utiliser les produits pour des transactions d'options d'achat plafonnées, des transactions d'achat prépayées et à des fins corporatives générales.
L'entreprise effectuera des transactions d'options d'achat plafonnées pour réduire la dilution potentielle et compenser les paiements en espèces au-delà du montant principal. De plus, IREN engagera une transaction d'achat prépayée d'actions ordinaires d'un montant allant jusqu'à 100 millions de dollars, qui sera réglée près de la date d'échéance des obligations.
IREN gibt bekannt, dass sie plant, 300 Millionen Dollar in wandelbare Senior-Anleihen mit Fälligkeit im Jahr 2030 anzubieten, mit einer zusätzlichen Option von 45 Millionen Dollar für Erstkäufer. Die Anleihen werden ungesicherte Senior-Verpflichtungen mit halbjährlichen Zinszahlungen sein, die in Bargeld, Stammaktien oder eine Kombination davon umgewandelt werden können. Das Unternehmen plant, die Erlöse für Capped Call-Transaktionen, eine vorab bezahlte Forward-Transaktion und allgemeine Unternehmenszwecke zu verwenden.
Das Unternehmen wird Capped Call-Transaktionen durchführen, um mögliche Verwässerungen zu verringern und potenzielle Barauszahlungen über den Hauptbetragsbetrag hinaus auszugleichen. Darüber hinaus wird IREN eine vorab bezahlte Aktienkauftransaktion für bis zu 100 Millionen Dollar seiner Stammaktien eingehen, die kurz vor dem Fälligkeitstermin der Anleihen abgewickelt wird.
- Access to $300 million in funding through convertible notes offering
- Additional $45 million option available for initial purchasers
- Implementation of capped call transactions to minimize share dilution
- $100 million prepaid forward share purchase transaction to manage stock price impact
- Potential dilution of existing shareholders upon note conversion
- Increased debt obligations with semi-annual interest payments
- Risk of mandatory cash repurchase in case of fundamental changes
Insights
The proposed
Key features include conversion rights, redemption options after December 2027 at
This financing move provides substantial working capital but introduces potential dilution risks and complex market dynamics through the hedging arrangements. The structure suggests a balanced approach between securing funding and protecting existing shareholders, though market impact will depend heavily on final pricing terms.
SYDNEY, Dec. 03, 2024 (GLOBE NEWSWIRE) -- IREN Limited (NASDAQ: IREN) (ACN 629 842 799) (“IREN”) today announced its intention to offer, subject to market and other conditions,
The notes will be senior, unsecured obligations of IREN, will accrue interest payable semi-annually in arrears and will mature on June 15, 2030, unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. IREN will settle conversions by paying or delivering, as the case may be, cash, its ordinary shares or a combination of cash and its ordinary shares, at its election.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at IREN’s option, on or after December 20, 2027 and on or before the 30th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of IREN’s ordinary shares exceeds
If certain corporate events that constitute a “fundamental change” occur, then, subject to a limited exception, noteholders may require IREN to repurchase their notes for cash. The repurchase price will be 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.
The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.
IREN expects to use a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions and to fund the cost of entering into the prepaid forward transaction, each as described below. IREN intends to use the remainder of the net proceeds for general corporate purposes and working capital.
In connection with the offering of the notes, IREN expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates and/or one or more other financial institutions (the “option counterparties”). The capped call transactions are expected to cover, subject to anti-dilution adjustments, the number of ordinary shares of IREN that will initially underlie the notes. If the initial purchasers exercise their option to purchase additional notes, then IREN expects to enter into additional capped call transactions with the option counterparties.
The capped call transactions are expected generally to reduce the potential dilution to IREN’s ordinary shares upon any conversion of the notes and/or offset any potential cash payments IREN is required to make in excess of the principal amount of converted notes, as the case may be, with such offset and/or reduction subject to a cap price. If, however, the market price per ordinary share of IREN, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions. In addition, the capped call transactions will be solely cash settled until IREN receives shareholder approval to repurchase its ordinary shares pursuant to the terms of the capped call transactions or is otherwise permitted to repurchase its ordinary shares pursuant to the terms of the capped call transactions under the laws of its jurisdiction of incorporation. The Company retains flexibility to seek and/or renew such approval from time to time during the terms of the capped call transactions at a general meeting or future annual general meeting.
IREN has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to IREN’s ordinary shares and/or purchase the ordinary shares of IREN concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of IREN’s ordinary shares or the notes at that time. Any such trades by the option counterparties or their respective affiliates would be on a principal basis and without any agreement, arrangement or understanding between, or with, IREN on how those parties would hedge their own positions.
In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to IREN’s ordinary shares and/or purchasing or selling IREN’s ordinary shares or other securities of IREN in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so (x) on each exercise date for the capped call transactions, which are expected to occur on each trading day during the 30 trading day period beginning on the 31st scheduled trading day prior to the maturity date of the notes and (y) following any early conversion of the notes or any repurchase of the notes by IREN on any fundamental change repurchase date, any redemption date or any other date on which the notes are repurchased by IREN, in each case if IREN exercises the relevant election to terminate the corresponding portion of the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of IREN’s ordinary shares or the notes, which could affect the ability of noteholders to convert the notes, and, to the extent the activity occurs following a conversion or during any observation period related to a conversion of the notes, it could affect the number of IREN’s ordinary shares and value of the consideration that noteholders will receive upon conversion of the notes.
In connection with the offering of the notes, IREN also expects to enter into a privately negotiated prepaid forward share purchase transaction (the “prepaid forward transaction”) with one of the initial purchasers of the notes or its affiliate (the “forward counterparty”), pursuant to which IREN will purchase up to
The prepaid forward transaction is generally intended to facilitate privately negotiated derivative transactions, including swaps, between the forward counterparty or its affiliates and investors in the notes relating to IREN’s ordinary shares by which investors in the notes will establish short positions relating to IREN’s ordinary shares and otherwise hedge their investments in the notes. As a result, the prepaid forward transaction is expected to allow the investors to establish short positions that generally correspond to (but may be greater than) commercially reasonable initial hedges of their investment in the notes. In the event of such greater initial hedges, investors may offset such greater portion by purchasing IREN’s ordinary shares on or shortly after the day IREN prices the notes. Facilitating investors’ hedge positions by entering into the prepaid forward transaction, particularly if investors purchase IREN’s ordinary shares on or shortly after the pricing date, could increase (or reduce the size of any decrease in) the market price of IREN’s ordinary shares and effectively raise the initial conversion price of the notes. In connection with establishing their initial hedges of the prepaid forward transaction, the forward counterparty or its affiliates may enter into one or more derivative transactions with respect to IREN’s ordinary shares with the investors of the notes concurrently with or after the pricing of the notes. Any such trades by the forward counterparty or its affiliates would be on a principal basis and without any agreement, arrangement or understanding between, or with, IREN on how those parties would hedge their own positions.
IREN’s entry into the prepaid forward transaction with the forward counterparty and the entry by the forward counterparty into derivative transactions in respect of IREN’s ordinary shares with the investors of the notes could have the effect of increasing (or reducing the size of any decrease in) the market price of IREN’s ordinary shares concurrently with, or shortly after, the pricing of the notes and effectively raising the initial conversion price of the notes.
Neither IREN nor the forward counterparty will control how investors of the notes may use such derivative transactions. In addition, such investors may enter into other transactions relating to IREN’s ordinary shares or the notes in connection with or in addition to such derivative transactions, including the purchase or sale of IREN’s ordinary shares. As a result, the existence of the prepaid forward transaction, such derivative transactions and any related market activity could cause more purchases or sales of IREN’s ordinary shares over the term of the prepaid forward transaction than there otherwise would have been had IREN not entered into the prepaid forward transaction. Such purchases or sales could potentially increase (or reduce the size of any decrease in) or decrease (or reduce the size of any increase in) the market price of IREN’s ordinary shares and/or the price of the notes.
In addition, the forward counterparty or its affiliates may modify their hedge positions by entering into or unwinding one or more derivative transactions with respect to IREN’s ordinary shares and/or purchasing or selling IREN’s ordinary shares or other securities of IREN in secondary market transactions at any time following the pricing of the notes and prior to the maturity of the notes. These activities could also cause or avoid an increase or a decrease in the market price of IREN’s ordinary shares or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs following conversion or during any observation period related to a conversion of notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.
The offer and sale of the notes and any of IREN’s ordinary shares 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 pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any of IREN’s ordinary shares issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction (including the United States and Australia) in which such offer, sale or solicitation would be unlawful.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated terms of the notes being offered, the completion, timing and size of the proposed offering and the intended use of the proceeds. Forward-looking statements represent IREN’s current expectations, beliefs, and projections regarding future events and are subject to known and unknown uncertainties, risks, assumptions and contingencies, many of which are outside IREN’s control and that could cause actual results to differ materially from those described in or implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of IREN’s ordinary shares and risks relating to IREN’s business, including those described in periodic reports that IREN files from time to time with the SEC. IREN may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or the notes or its ability to effectively apply the net proceeds after funding the cost of entering into the capped call transactions and financing the prepaid forward as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and IREN does not undertake any obligation to update the forward-looking statements included in this press release for subsequent developments, except as may be required by law. For a further discussion of factors that could cause IREN’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in IREN’s Annual Report on Form 20-F for the year ended June 30, 2024 and other risks described in documents filed by IREN from time to time with the Securities and Exchange Commission.
About IREN
IREN is a leading data center business powering the future of Bitcoin, AI and beyond utilizing
- Bitcoin Mining: providing security to the Bitcoin network, expanding to 50 EH/s in H1 2025. Operations since 2019.
- AI Cloud Services: providing cloud compute to AI customers, 1,896 NVIDIA H100 & H200 GPUs. Operations since 2024.
- Next-Generation Data Centers: 460MW of operating data centers, expanding to 810MW in H1 2025. Specifically designed and purpose-built infrastructure for high-performance and power-dense computing applications.
- Technology: technology stack for performance optimization of AI Cloud Services and Bitcoin Mining operations.
- Development Portfolio: 2,310MW of grid-connected power secured across North America, >2,000 acre property portfolio and additional development pipeline.
100% Renewable Energy (from clean or renewable energy sources or through the purchase of RECs): targets sites with low-cost & underutilized renewable energy, and supports electrical grids and local communities.
Contacts
| Media Jon Snowball Sodali & Co +61 477 946 068 Megan Boles Aircover Communications +1 562 537 7131 | Investors Lincoln Tan IREN +61 407 423 395 lincoln.tan@iren.com |
FAQ
What is the size of IREN's convertible notes offering in December 2024?
When will IREN's convertible notes mature?
How will IREN use the proceeds from the convertible notes offering?
What is the size of IREN's prepaid forward share purchase transaction?
