ModusLink Global Solutions, Inc. (“ModusLink”) (NASDAQ: MLNK) today announced its intention to offer $75 million aggregate principal amount of convertible senior notes due 2019 (the “notes”), subject to market conditions and other factors. The notes are to be offered and sold to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). ModusLink also expects to grant the initial purchaser of the notes a 30-day option to purchase up to an additional $11.25 million aggregate principal amount of the notes.
The notes will be unsecured and unsubordinated obligations of ModusLink, and will rank equal in right of payment with ModusLink’s other unsecured and unsubordinated indebtedness, but will be effectively subordinated in right of payment to any existing and future secured indebtedness and liabilities to the extent of the value of the collateral securing those obligations, and structurally subordinated to the indebtedness and other liabilities of ModusLink’s subsidiaries. Interest will be payable semi-annually in arrears, and the notes will be convertible into shares of ModusLink’s common stock, or, if ModusLink obtains the required consent from its shareholders, into shares of ModusLink’s common stock, cash or a combination of cash and shares of its common stock, at ModusLink’s election. Holders will have the right to require ModusLink to repurchase their notes upon the occurrence of certain fundamental changes, subject to certain conditions, at a repurchase price equal to 100% of the principal amount of the notes plus accrued and unpaid interest. ModusLink will have the right to elect to cause the mandatory conversion of the notes in whole, and not in part, at any time on or after March 6, 2017, subject to certain conditions including that the stock price of ModusLink exceeds a certain threshold. Final terms of the notes, including the interest rate, conversion rate, offering price and other terms, will be determined at the time of pricing based on negotiations with the initial purchaser of the notes.
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