Microchip Technology Announces Exchange of Convertible Notes
Microchip Technology announced exchange agreements for its Convertible Senior Subordinated Notes, involving approximately 2.7 million shares of common stock and $266 million in cash. This exchange is for $70.4 million of 2025 Notes, $100.7 million of 2027 Notes, and $92.5 million of 2037 Notes. The actual cash and stock amounts may vary based on stock price fluctuations. The exchanges are set to close around August 17, 2021, and will be funded through borrowings and existing cash. The shares will be issued under the Securities Act exemption.
- Conversion of outstanding notes reduces future interest liabilities.
- Private exchange transactions will improve the balance sheet by reducing debt.
- No cash proceeds will be received from the exchange transactions, indicating potential liquidity concerns.
- Future stock price fluctuations could impact the total cash and shares exchanged.
CHANDLER, Ariz., Aug. 12, 2021 (GLOBE NEWSWIRE) -- (NASDAQ: MCHP) – Microchip Technology Incorporated, a leading provider of smart, connected and secure embedded control solutions, today announced that that it has entered into separate privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders of its outstanding
The foregoing amounts of cash and stock are subject to adjustment during a one-day measurement period ending August 12, 2021. Accordingly, such approximate amounts are estimates based on an assumed price per share of Common Stock equal to the closing price per share of Common Stock on The Nasdaq Global Select Market on the date of the applicable Exchange Agreement and the Reference Price used in the Exchange Transactions. The actual amounts of cash paid and shares of Common Stock issued could vary depending on changes in the trading price of the Common Stock during the measurement period. The Exchange Transactions are expected to close on or about August 17, 2021. Following the closing of the Exchange Transactions, approximately
The Exchange Transactions are being conducted as a private placement and the shares of Common Stock to be issued in the Exchange Transactions will be issued pursuant to the exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and were offered only to persons believed to be either (i) an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act. The Company is relying on this exemption from registration based on the representations made by the holders of the Notes participating in the Exchange Transactions.
About Microchip:
Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. The company's solutions serve more than 120,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.
The Microchip logo and name are registered trademarks of Microchip Technology Incorporated.
INVESTOR RELATIONS CONTACT:
J. Eric Bjornholt – CFO
(480) 792-7804
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