EnPro Industries Completes Partial Purchase of Convertible Senior Debentures Due 2015
By Business Wire News
By Business Wire News
EnPro Industries, Inc. (NYSE: NPO) announced today that it recently purchased for cash approximately $21.3 million in aggregate principal amount of its 3.9375% Convertible Senior Debentures due 2015 in a privately negotiated transaction. The purchase reduces the aggregate principal amount of the debentures outstanding to $2,180,000 and eliminates future interest payments associated with the purchased debentures, which will result in cash savings of approximately $500,000.
In addition, the Company’s remaining aggregate principal amount of 3.9375% Convertible Senior Debentures due 2015 will continue to be convertible by holders of the Debentures through June 30, 2015. Conversion rights remain in effect because the closing price per share of EnPro’s common stock has exceeded $43.79, or 130% of the dividend-adjusted conversion price of $33.68, for at least 20 of the 30 consecutive trading days ending on March 31, 2015. The Debentures remain convertible until June 30, 2015, and may be convertible thereafter, if one or more of the conversion conditions specified in the Indenture, dated as of October 26, 2005, by and between EnPro Industries, Inc. and U.S. Bank National Association (as successor to Wachovia Bank, National Association), is satisfied during future measurement periods.
If conversion requests are received, the settlement of the Debentures will be paid pursuant to the terms of the Indenture, which calls for conversion into a combination of cash and common stock of the company. Upon conversion, the lesser of the $1,000 principal amount of each debenture and its conversion value would be settled in cash; to the extent the conversion value exceeds $1,000, the remaining amount due to the holders would be settled in shares of the company’s common stock.
Holders who complete all requirements for conversion of the Debentures on October 15, 2015 prior to the close of business will be considered to have converted the Debentures prior to the close of business on the stated maturity date. Holders who convert Debentures on the stated maturity date will be entitled to retain the interest payment on those Debentures to be paid on that date without having to deliver an amount equal to that payment in connection with the conversion.
At the time of the original sale of the Debentures, a portion of the net proceeds was used to enter into call options (hedge and warrant transactions) which entitled the company to purchase shares of its common stock from a financial institution at $33.68 per share and entitled the financial institution to purchase shares from the company at $46.64 per share. The strike prices have been adjusted under the option contracts for the effect of the declaration and payment of a dividend in the first quarter. These hedge and warrant transactions were entered into to reduce potential dilution to holders of the company’s common stock from conversion of the Debentures by increasing the effective conversion price to EnPro to $46.64 a share (subject to the adjustment for dividends).
On March 17, 2015, the company entered into an agreement to effectively harmonize and accelerate the settlement obligations of the parties under the call options, which will result in a net-share settlement with shares being delivered to the company during the second quarter of 2015.
U.S. Bank National Association is the trustee for the holders of the Debentures and the conversion agent under the Indenture. All questions relating to the mechanics of the conversion for the Debentures should be directed to U.S. Bank National Association, Attn: Jacob Schmitz, Specialized Finance, 111 Fillmore Ave. E., St. Paul, Minnesota 55107; telephone (651) 466-6774.
This press release is only a summary of certain provisions of the Debentures and the Indenture. A complete explanation of the conversion rights of holders of the Debentures, as well as the procedures required to convert the Debentures is set forth in the Indenture. All holders are urged to review the conversion provisions contained in the Indenture in its entirety.
About EnPro Industries
EnPro Industries, Inc. is a leader in sealing products, metal polymer and filament wound bearings, components and service for reciprocating compressors, diesel and dual-fuel engines and other engineered products for use in critical applications by industries worldwide. For more information about EnPro, visit the company’s website at http://www.enproindustries.com.
EnPro Industries, Inc.
Dan Grgurich, 704-731-1527
Director, Investor Relations and