Boston, MA, 11/13/2013 (wallstreetpr) – The management of Micron Technology Inc (NASDAQ:MU) recently announced a series of actions which would be expecting results in the extinguishment of their 1.875% Convertible Senior Notes which is due in 2027, their 1.50% convertible Senior Notes due 2031 and approximately 59 percent of their 1.875% convertible senior notes due in 2031. The company is planning to make use of approximately $525 million of cash in order to achieve this outcome.
According to the vice president and CFO of Micron Technology Inc, Ron Foster the announced actions will help in reducing the future as well as current potential dilutive effect of the existing convertible notes of the company. After the transactions are completed, the management of the company expects to eliminate around 34 million shares from the current dilutive share count. Moreover, the new notes which are being launched by the company would help in pushing out the debt maturities and reduction in the share dilution exposure till the time stock price exceeds $29.16. The company is still committed in improving the capital structure of the company. The New Notes have been designed with a convertible security which would help in providing financial flexibility to the users.
The management of the Micron Technology Inc expects that all the 2027 Notes and 2031A Notes would remain outstanding after the exchanged transactions will be converted before the expiration of their conversion rights. The effective conversion prices of the 2027 Notes and 2031A Notes are $10.90 and $9.50 respectively. This helps in representing a substantial discount to the current market price of the company’s common stock.
The New Notes being launched by the company will have a 30 year term and would also be convertible under all the circumstances. The initial conversion rate decided by the company is 34.29.
