NEW YORK (TheStreet) -- UTi Worldwide (UTIW) was plunging 23.95% to $11.60 Wednesday after the global supply chain management solutions company announced a refinancing plan and issued guidance well below analysts' expectations.
The company announced it had breached some debt covenants and would need to raise approximately $525 million to pay off a minimum debt of $400 million that could come due in April. UTi said it would issue $350 million in senior notes due 2019 in a private offering. and also plans to raise $175 million through the issuing of convertible preferred shares to its largest shareholder, P2 Capital Partners. This would raise P2's stake in the company to 18.1% from 10.76%, according to Thomson Reuters.
Furthermore, UTi forecast a loss of 33 to 38 cents a share and revenue of $1.05 billion to $1.1 billion for the fourth quarter ended Jan. 31. Analysts expected a profit of 6 cents a share on revenue of $1.13 billion, according to Thomson Reuters.
TheStreet Ratings team rates UTI WORLDWIDE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate UTI WORLDWIDE INC (UTIW) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."