AKRON, Ohio--(BUSINESS WIRE)--Babcock & Wilcox Enterprises, Inc. ("B&W" or the "Company") (NYSE: BW) announced that on February 12, 2021 it closed an underwritten public offering of 29,487,180 shares of common stock, which included 3,846,154 shares issued in connection with the underwriter’s option to purchase additional shares, at a price to the public of $5.85 per share, for gross proceeds of approximately $172.5 million. The Company also announced that on February 12, 2021 it closed an underwritten public offering of $125.0 million aggregate principal amount of 8.125% senior notes due 2026, which included $5 million aggregate principal amount of senior notes issued in connection with the underwriters’ option to purchase senior notes. Gross proceeds for both offerings are exclusive of underwriting discounts and commissions and estimated offering expenses payable by the Company.
B&W and the senior notes both received a rating of BB+ from Egan-Jones Ratings Company, an independent, unaffiliated rating agency. The notes are expected to begin trading on NYSE under the symbol “BWSN” as early as February 17, 2021.
In addition to the public offering, B. Riley Financial, Inc exchanged $35 million of its existing Tranche A term loan for $35 million principal amount of senior notes in a concurrent private offering, and the interest rate on the remaining Tranche A term loan balance has been reduced to an interest rate of 6.625%, compared to its current rate of 12%.
The two offerings resulted in net proceeds of approximately $283 million after deducting underwriting discounts and commissions, but before expenses. The Company expects to use the net proceeds of this offering to support clean energy growth initiatives and to pay down its revolving credit facility by approximately $167 million while permanently reducing the facility size by approximately $94 million.
“We expect the proceeds derived from this raise to significantly reduce our secured debt and future cash interest payments, de-lever our balance sheet, support expansion of our clean energy technologies portfolio, and provide a strong foundation to pursue our more than $5 billion 3-year pipeline of identified opportunities on top of our strong, high-margin parts and services business,” said Kenneth Young, B&W’s Chairman and CEO. “Looking forward, we remain focused on growing our Renewable and Environmental segments, including deploying our waste-to-energy and carbon capture technologies to help meet critical climate goals, as the next-generation B&W powers the global energy and environmental transformation.”
B. Riley Securities, Inc., acted as the lead book-running manager for the common stock offering. D.A. Davidson & Co. and Janney Montgomery Scott LLC acted as joint book-running managers for the common stock offering. Lake Street Capital Markets, LLC and National Securities Corporation acted as co-managers for the common stock offering.
B. Riley Securities, Inc. acted as lead book-running manager for the senior notes offering. D.A. Davidson & Co., Janney Montgomery Scott LLC, Ladenburg Thalmann & Co. Inc., and National Securities Corporation acted as joint book-running managers for the senior notes offering. Aegis Capital Corp., Boenning & Scattergood, Inc., Huntington Securities, Inc. and Kingswood Capital Markets, division of Benchmark Investments, Inc. acted as co-managers for the senior notes offering.
The common stock and senior notes were offered under the Company's shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission ("SEC") on February 13, 2020. The offerings were made only by means of a prospectus supplement and accompanying base prospectus. Copies of the prospectus supplement and the accompanying base prospectus for the offering may be obtained on the SEC's website at www.sec.gov, or by contacting B. Riley Securities by telephone at (703) 312-9580, or by email at email@example.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward looking statements include, but are not limited to, statements regarding the Company's public offerings of common stock and senior notes, B. Riley Financial’s exchange of a portion of its existing Tranche A term loan for $35 million of senior notes, the revolving credit facility to be permanently reduced by 75% of the senior note value, exclusive of the value of the B. Riley Financial term loan exchange, the interest on remaining Tranche A term loan to be significantly reduced, and the pursuit of more than $5 billion 3-year pipeline of identified opportunities. Factors that could cause such actual results to differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks associated with the unpredictable and ongoing impact of the COVID-19 pandemic and other risks described from time to time in the Company's periodic filings with the SEC, including, without limitation, the risks described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). These factors should be considered carefully, and B&W Enterprises cautions not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.
About Babcock & Wilcox Enterprises
Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises is a global leader in energy and environmental technologies and services for the power and industrial markets.