Maui Land & Pineapple Company, Inc. (NYSE:MLP) intends to pursue a rights offering for up to $40 million of its common stock. The record date for the rights offering is July 7, 2010.
The Company intends to utilize the proceeds from the rights offering to repurchase up to all of its outstanding senior secured convertible notes, which we refer to as the Notes. The aggregate principal amount outstanding under the Notes is $40 million. As of June 24, 2010, the Company has entered into agreements to purchase at least $27.5 million of the Notes upon successful completion of the rights offering. The Company may enter into repurchase agreements on the same terms with other holders of Notes prior to completion of the rights offering.
Upon commencement of the rights offering, shareholders will receive one non-transferable subscription right for each share of common stock owned as of the close of business on July 7, 2010. Each subscription right will entitle the shareholder to purchase a specified number of shares of common stock, which will be determined based upon the total number of outstanding shares of common stock on the record date and the subscription price of the shares. Shareholders who fully exercise all of their initial subscription rights will be entitled to purchase any unsubscribed shares at the same subscription price per share, on a pro rata basis.
A registration statement on Form S-1 relating to the subscription rights has been filed with the United States Securities and Exchange Commission, which we refer to as the SEC, but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The rights offering will be made only by means of a prospectus.