Indie Semiconductor Shares Sink on Convertible Notes Offering

Dow Jones12-04

By Dean Seal

Shares of Indie Semiconductor fell after the company said it plans to offer $175 million in convertible senior notes.

The stock was down 20%, at $4.22, in the Tuesday afternoon session. The stock has fallen 48% since the start of the year.

The chipmaker said after the bell on Monday that it has set up a $175 million private offering to institutional buyers, which will include an option to purchase up to an additional $26 million in notes.

The final terms of the notes will be determined when the offering gets priced. Indie can redeem any amount of the notes for cash on or after Dec. 20, 2027. If it redeems fewer than all of them, it has to leave at least $50 million of notes outstanding.

Indie intends to use a portion of the proceeds to pay the cost of capped call transactions it plans to enter into with one or more of the notebuyers. The transactions should help reduce potential stock dilution if the notes are converted, Indie said.

The rest of the proceeds will be used for working capital and general corporate purposes, including potential acquisitions, though Indie doesn't have any deals on paper at this time, the company said.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

December 03, 2024 14:30 ET (19:30 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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