2008-03-16 12:10:09 -
www.rasertech.com - Raser Technologies, Inc. Richard Putnam, Investor Relations, 801-765-1200 investorrelations@rasertech.com or Hayden Communications, Inc. Cameron Donahue, 651-653-1854 cameron@haydenir.com Raser Technologies, Inc. (NYSE Arca: RZ) today announced its intention to offer, subject to market and other conditions, $75 million principal amount of Senior Convertible Notes due 2013 through a private offering to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Upon conversion, holders will receive common stock based on a conversion rate reflecting a premium to the market price of the common stock at the time the notes are priced. Raser also expects to grant the initial purchaser an option to purchase up to an additional $25 million aggregate principal amount of the notes to cover overallotments. Sufficient proceeds from the offering will be placed in escrow and pledged to secure the payment of the first two years of interest payable on the notes.
The interest rate, conversion price and other terms of the notes will be determined by negotiations between Raser and the initial purchaser of the notes. In addition, Raser expects to enter into separate call spread and prepaid forward share repurchase transactions with an affiliate of the initial purchaser of the notes, as counterparty. The call spread transactions will generally have the effect on the Company of increasing the conversion price of the notes. Raser currently expects to use approximately $10 million of the net proceeds from the offering to repurchase shares of its common stock pursuant to the prepaid forward share repurchase contract. Together, these transactions are intended to reduce potential dilution to Raser's common stock upon potential future conversion of the notes. In connection with these transactions, the hedge counterparty has advised Raser that it or its affiliates may enter into various derivative transactions with respect to Raser's common stock concurrently with or following the pricing of the notes. However, the counterparty or its affiliates may from time to time, following the pricing of the notes, enter into or unwind various derivative transactions with respect to Raser's common stock in secondary market transactions. These activities could have the effect of decreasing the price of Raser's common stock and could affect the price of the notes.
Raser intends to use the majority of the net proceeds from the offering to continue well field and other development activities for the geothermal power plants Raser intends to develop and for general corporate purposes. Raser expects to use a portion of the net proceeds to fund the interest escrow account described above. In addition, net proceeds from the offering will be used to fund the cost of the above-described call spread and prepaid forward share repurchase transactions.
This notice does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the securities will be made only by means of a private offering memorandum. The securities and the shares of Raser common stock issuable upon conversion or exercise of the securities have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
About Raser Technologies
Raser (NYSE Arca: RZ) is a publicly-traded, environmentally focused technology licensing and development company operating in two business segments. Raser's Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology and Raser's Symetron(TM) technology developed internally by its Transportation and Industrial Technology segment. Raser's Transportation and Industrial Technology segment focuses on using Raser's Symetron(TM) technology to improve the efficiency of electric motors and other applications.
Raser to Use $10 Million to Repurchase Common Stock
