Sevcon announces rights offering terms
Sevcon Inc. of Southborough has announced the terms of its $10-million rights offering to shareholders.
The company, which makes microprocessor-based controls for electric and hybrid vehicles, said preferred stock purchased in the rights offering will carry a 4-percent cumulative annual dividend, and will be convertible at any time into shares of Sevcon’s common stock, at an initial price of $8 per share. The conversion ratio will be three shares of common stock for each share of preferred stock purchased in the rights offering. Sevcon will be able to require conversion at any time after five years, or if the closing sale price of its common stock has exceeded $15.50 for 20 out of 30 consecutive trading days.
Common stockholders received one transferable subscription for each share of common stock owned on July 25, according to the company.Each subscription will be good for the purchase of preferred stock at a price of $21.50 per share, which is equivalent to $7.17 per share of common stock on a converted bases, a 7.3-percent discount from the closing sale price of $7.73 on July 28.
Subscription rights, if not used, will expire on Sept. 8, unless Sevcon decides to extend the rights offering period.
Sevcon said Meson Capital LP, which is managed by two Sevcon directors, has agreed to purchase up to $1.15 million of stock. A number of other directors and officers have also indicated their intention to buy stock, Sevcon said.
Proceeds of the rights offering will be used for “general corporate purposes and growth, including funding Sevcon’s ongoing research and development and product commercialization initiatives and acquisitions of other businesses,” according to a statement from Sevcon.
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