Bristow Group Inc. (NYSE: BRS) announced today that it intends to offer, subject to market and other conditions, $125 million aggregate principal amount of convertible senior notes due 2023 (the “notes”), through an underwritten offering registered under the Securities Act of 1933, as amended. The company intends to grant the underwriters an option to purchase up to an additional $18.75 million aggregate principal amount of notes to cover over-allotments.
The notes are expected to pay interest semi-annually and will be convertible into cash, shares of the company’s common stock or a combination of cash and shares of the company’s common stock, at the company’s election. The notes will mature on June 1, 2023, unless earlier converted or repurchased in accordance with their terms prior to such date, and may not be redeemed by the company prior to maturity. Prior to December 1, 2022, the notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date. The interest rate, initial conversion rate and certain other pricing terms of the notes will be determined at the time the offering is priced by the company and the underwriters.
In connection with the pricing of the notes, the company expects to enter into one or more convertible note hedge transactions with certain of the underwriters or affiliates thereof (the “option counterparties”). The convertible note hedge transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of the company’s common stock underlying the notes. Concurrently with entering into the convertible note hedge transactions, the company also expects to enter into one or more warrant transactions with the option counterparties whereby the company will sell to the option counterparties warrants to purchase, subject to customary anti-dilution adjustments and net share settlement provisions, up to the same number of shares of the company’s common stock.
The convertible note hedge transactions are expected generally to reduce the potential dilution upon any conversion of the notes and/or offset the potential cash payments the company may be required to make in excess of the principal amount of converted notes in the event that the market price per share of the company’s common stock, as measured under the terms of the convertible note hedge transactions, is greater than the strike price of the convertible note hedge transactions, which is expected initially to correspond to the conversion price of the notes and be subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the notes. The warrant transactions could separately have a dilutive effect to the extent that the market price per share of the company’s common stock, as measured over the applicable valuation period at the maturity of the warrants, exceeds the strike price of the warrants.
The company intends to use a portion of the net proceeds from the offering of the notes to repay a portion of the indebtedness outstanding under its term loan and to pay the cost of the convertible note hedge transactions (after such cost is partially offset by the proceeds to the company of the warrant transactions), with the remainder of the net proceeds from this offering to be used for general corporate purposes. If the underwriters exercise their over-allotment option, the company expects to sell additional warrants and use a portion of the net proceeds from the sale of the additional notes to enter into additional convertible note hedge transactions with the option counterparties, as well as use a portion of the net proceeds from the sale of such additional warrants and additional notes to make additional repayments of indebtedness outstanding under its term loan.
The company has been advised by the option counterparties that in connection with establishing their initial hedge position with respect to the convertible note hedge transactions and warrant transactions, the option counterparties and/or their respective affiliates expect to enter into various derivative transactions with respect to the company’s common stock 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 the company’s common stock or the notes at that time.
The company has also been advised by the option counterparties that the option counterparties and/or their respective affiliates are likely to modify their hedge positions by entering into or unwinding various derivative transactions with respect to the company’s common stock and/or purchasing or selling the company’s common stock or other of the company’s securities, including the notes, in secondary market transactions following the pricing of the notes and prior to the maturity of the notes. This activity could cause or avoid an increase or a decrease in the market price of the company’s common stock or the notes, which could affect the bondholders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, could affect the amount and value of the consideration that bondholders will receive upon conversion of the notes.
The notes are being offered pursuant to an effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the “Commission”).
Credit Suisse Securities (USA) LLC and Barclays Capital Inc. are acting as joint book-running managers and representatives of the underwriters.
The offering is being made only by means of a prospectus and related preliminary prospectus supplement, which will be filed with the Commission. A copy of the prospectus and preliminary prospectus supplement relating to the offering may be obtained from the offices of Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010, Attn: Prospectus Department, phone: 1-800-221-1037, email: [email protected]; and Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, phone: 1-800-603-5847, email: [email protected]. An electronic copy of the prospectus will be available on the website of the Commission at www.sec.gov.
This news release shall not constitute an offer to sell or a solicitation of an offer to purchase these notes nor shall there be any sale of the notes 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.
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