Boston, MA 03/13/2014 (wallstreetpr) – Moduslink Global Solutions, Inc. (NASDAQ:MLNK) is in need of money, no doubt. And the company has now turned to convertible senior notes to raise at least some of the money it needs. The money to be realized through the offering of the senior notes has been earmarked for growth and various corporate spending.
In the early afternoon trading, shares of Moduslink Global Solutions, Inc. (NASDAQ:MLNK) were down 14.21 percent to $4.20. Earlier on the shares had escalated to the high of $4.44 and dropped to the low of $4.11, having opened the regular session at $4.40.
Senior Notes Offering
Moduslink Global Solutions, Inc. (NASDAQ:MLNK) is seeking to raise $90 million from the offering of convertible senior notes whose maturity is 2019. The offering is being made to qualified institutional buyers with a 30-day leave to purchase additional notes of $10 million.
The company expects the offering to close on or about March 18. However, that is subject to the satisfaction of customary conditions regarding closing of such transactions.
The notes will attract semi-annual interest at the rate of 5.25 percent per annum. Thus, on semi-annual basis, the interest will be payable on March 1 and September 1, each year. Therefore, the first interest payment on the notes will be on September 1, 2014.
Unless the notes are converted or purchased earlier, they will be due for redeeming on March 1, 2019. Moduslink Global Solutions, Inc. (NASDAQ:MLNK) stated that the notes it is just about to offer are unsubordinated obligations as well as unsecured.
Spending Of The Proceeds
Moduslink Global Solutions, Inc. (NASDAQ:MLNK) has earmarked various projects in which the resulting $90 million or so from the notes offering will be spent. Among other things, the company hopes that it will be able to use the money for acquisition, strategic business opportunities and if enough, for working capital and so on. However, in the press release announcing the offering, the company stated that there are currently no probable material acquisitions.
Bottom Line
The notes offering provide a simple way out for Moduslink Global Solutions, Inc. (NASDAQ:MLNK) to secure the funding it requires for its various projects. It is also in the best interest of the current shareholders that the company has not taken to share dilution to raise the money.
