NOT FOR DISTRIBUTION IN OR INTO THE U.S. (OR TO U.S. PERSONS), CANADA, AUSTRALIA, OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW
London, UK: 31 August 2016. Inmarsat plc (LSE: ISAT.L, “Inmarsat” or the “Company”) today announces the successful placement of $650 million convertible bonds due 2023 (the “New Bonds”). This represents an additional $50 million over the announced deal size reflecting considerable demand for the New Bonds.
The net proceeds of the issue of the New Bonds will be used primarily to fund the approximately $390 million repurchase (“Concurrent Repurchase”) of the outstanding 1.75% $287.7 million convertible bonds due 2017 (the “Outstanding Bonds”) and the related accrued interest. The remaining proceeds will further strengthen Inmarsat’s financial position and support its strategy of continued investment in innovation and the delivery of global mobile satellite service solutions, where Inmarsat continues to see opportunities for sustained profitable growth. The New Bonds will be issued as part of the Inmarsat Group’s ongoing plans to optimise financing costs and the Group’s debt maturity profile. The Group currently intends to launch a further benchmark offering in the debt capital markets this year, subject to market conditions.
The New Bonds will be convertible into fully paid new and/or existing ordinary shares of Inmarsat (“Ordinary Shares”) on a net share settlement basis to minimise dilution. This means that, upon exercise of conversion rights, the value of the Ordinary Shares underlying a New Bond will be delivered by (i) a payment in cash up to the principal amount of a New Bond, and (ii) the delivery of Ordinary Shares representing any excess conversion value over the principal amount, subject to a cap of 22,555,650 shares (representing 5% of the Company’s issued share capital immediately prior to the offering).
The New Bonds will have a coupon of 3.875% per annum payable semi-annually in arrears in equal instalments and an initial conversion price of $13.4093, implying a premium of 32.5% to the volume weighted average price of an Ordinary Share on the London Stock Exchange between launch and closing of the market on 31 August 2016, converted at the relevant USD:GBP rate. The New Bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or purchased and cancelled, will be redeemed at par on the seventh anniversary of the issue of the New Bonds in 2023. The Company will have the option to call the New Bonds on or after the date falling five years and 21 days after the Closing Date (as defined below), should the parity value of a New Bond (determined by reference to the prevailing conversion ratio and the USD-equivalent volume weighted average price of an Ordinary Share) be at least 140% of the principal amount of a New Bond for at least 20 out of 30 consecutive dealing days.
Settlement and delivery of the New Bonds is expected to take place on 9 September 2016 (the “Closing Date”).
It is intended that application will be made for the New Bonds to be listed on the Channel Islands Securities Exchange or another recognised stock exchange and the Open Market of the Frankfurt Stock Exchange prior to the first interest payment date.
Credit Suisse and J.P. Morgan Cazenove are Joint Bookrunners. BofA Merrill Lynch is Co-bookrunner.
Repurchase of outstanding convertible bonds due 2017
The total principal amount of the Outstanding Bonds due 2017 to be repurchased is equal to $285.4 million representing approximately 99.2% in outstanding nominal amount of the Outstanding Bonds due 2017.
Holders whose Outstanding Bonds are repurchased by the Company will be eligible to receive a cash consideration of $136,000 per Outstanding Bond.
In addition, the Company will pay interest accrued but unpaid on the Outstanding Bonds from and including the immediately preceding interest payment date to but excluding the Settlement Date of the Concurrent Repurchase.
The Company intends to exercise its right to redeem, at its option, the Outstanding Bonds in accordance with their terms and conditions.
Any Outstanding Bonds repurchased will be cancelled after settlement by the Company.
Settlement of the Concurrent Repurchase is expected to take place on 12 September 2016.
 Such excess is computed as the principal amount, multiplied by the ratio of the market price at conversion and the conversion price at the time of conversion, less the principal amount.
Inmarsat plc is the leading provider of global mobile satellite communications services. Since 1979, Inmarsat has been providing reliable voice and high-speed data communications to governments, enterprises and other organizations, with a range of services that can be used on land, at sea or in the air. Inmarsat operates in more than 60 locations around the world, with a presence in the major ports and centres of commerce on every continent. Inmarsat is listed on the London Stock Exchange (ISAT.L).
The Inmarsat press release newsfeed and corporate updates are on @InmarsatGlobal.
The information contained in this announcement is for background purposes only and does not purport to be full or complete.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States or to U.S. Persons (each as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to or from any person in the United States, Australia, Canada, Japan or in any other jurisdiction to whom or in which offers or sales is unlawful. The securities referred to in this announcement have not been and will not be registered under the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of U.S. persons, unless registered under the Securities Act or pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the securities in the United States, Australia, Canada or Japan.
The Concurrent Repurchase is not being made and will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, e-mail and other forms of electronic transmission) of interstate or foreign commerce of, or any facility of a national securities exchange of, the United States, and the Concurrent Repurchase may not be accepted by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States or by persons who are U.S. Persons, or persons (including agents, fiduciaries or other intermediaries) acting for the account or benefit of persons located or resident in the United States or of any U.S. Persons. Any purported acceptance of the Concurrent Repurchase resulting directly or indirectly from or in a violation of these restrictions will be invalid and if made by a person located or resident in the United States or who is a U.S. Person or any person (including any agent, fiduciary or other intermediary) acting for the account or benefit of persons located or resident in the United States or any U.S. Person will not be accepted. For these purposes, “United States” means the United States of America, its territories and possessions, any State of the United States of America and the district of Columbia.
No action has been or will be taken by Credit Suisse Securities (Europe) Limited or J.P. Morgan Securities plc (together, the “Joint Bookrunners”), Merrill Lynch International (the “Co-Bookrunner” and, together with the Joint Bookrunners, the “Bookrunners”) or the Company that would, to the best of their knowledge, permit the possession or distribution of any offering or publicity material relating to the Concurrent Repurchase in any country or jurisdiction where action for that purpose is required. The Joint Bookrunners have only distributed materials relating to the Concurrent Repurchase in any country or jurisdiction in compliance, to the best of their knowledge and belief, in all material respects with all applicable securities laws and regulations in such country or jurisdiction. Holders of Outstanding Bonds participating in the Concurrent Repurchase and/or submitting indications of interest were and are required to do so only in compliance with all applicable securities laws and regulations.
The offering of the New Bonds is addressed to, and directed in member states of the European Economic Area (the “EEA”) which have implemented the Prospectus Directive (the “Prospectus Directive”) at, persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (directive 2003/71/EC, as amended) (“qualified investors”). In addition, in the United Kingdom, the offering of the New Bonds is directed only at qualified investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) qualified investors falling within Article 49(2)(a) to (d) of the Order, or (iii) to whom it may otherwise lawfully be communicated under the Order (all such persons together being referred to as “relevant persons”). This announcement must not be acted on or relied on by persons who are not relevant persons in the United Kingdom or qualified investors elsewhere in the EEA as the case may be. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons or qualified investors as the case may be.
Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the New Bonds. The value of the New Bonds can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the New Bonds for the person concerned.
Each of the Bookrunners, each of which is authorised and supervised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the offering of the New Bonds or the Concurrent Repurchase and will not be responsible to any other person for providing the protections afforded to clients of such Bookrunner, respectively, or for providing advice in relation to the offering of the New Bonds, the New Bonds, the Concurrent Repurchase or any other transaction, matter or arrangement referred to in this announcement.
Each of the Company, the Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
In connection with the offering of the New Bonds and/or the Concurrent Repurchase, the Bookrunners and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities and any other securities of the Company or related investments in connection with the New Bonds, the Concurrent Repurchase, the Company or otherwise. Accordingly, references to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Bookrunners and any of their respective affiliates acting as investors for their own accounts. None of the Bookrunners intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. The Bookrunners may, in their sole discretion, acquire, own or dispose of Outstanding Bonds, and they were under no obligation to offer to sell, or refrain from offering to sell, any Outstanding Bonds they may hold pursuant to the Concurrent Repurchase.
None of the Bookrunners or any of their respective directors, officers, employees, affiliates, advisers or agents accepts any responsibility, duty or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its other subsidiaries or associated companies or any securities referred to herein, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.
For the avoidance of doubt, neither the Company nor the Bookrunners make any representation or warranty that they intend to accept or be bound to any of the terms herein nor shall the Company or the Bookrunners be obliged to enter into any further discussions or negotiations pursuant thereto but shall be entitled in their absolute discretion to act in any way that they see fit in connection with the proposed transaction. This is not an offer to sell, nor a solicitation of an offer to buy any securities, and any discussions, negotiations or other communications that may be entered into, whether in connection with the terms set out herein or otherwise, shall be conducted subject to contract.
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