BETHESDA, Md. - Centrus Energy (NYSE:LEU) Corp. (NYSE American: LEU) has priced a private offering of $350 million in 2.25% Convertible Senior Notes due 2030, targeted at qualified institutional buyers. The transaction is expected to close on Thursday, subject to customary closing conditions.
The notes will pay interest semiannually and mature on November 1, 2030, unless repurchased, redeemed, or converted earlier. The initial conversion rate is set at 10.2564 shares of Centrus Class A common stock per $1,000 principal amount of notes, which is a 25% premium over the stock's last sale price on the NYSE American as of November 4, 2024.
Centrus has also given initial purchasers an option to buy up to an additional $52.5 million in notes within a 13-day period starting from the issue date. The notes will be senior unsecured obligations of Centrus, ranking equally with its unsecured debt and junior to any secured debt, including the 8.25% Notes due 2027.
The company has outlined that the notes will not be redeemable before November 8, 2027, but afterward, they may be redeemed at Centrus' discretion under certain conditions. Noteholders have the right to require Centrus to repurchase their notes upon a fundamental change, at 100% of the principal amount plus any accrued interest.
Centrus expects net proceeds from the offering to be approximately $337.9 million, or $388.7 million if the additional notes are fully purchased, after deducting fees and estimated expenses. The funds are intended for general corporate purposes, which may include technology investment, debt repayment, capital expenditures, and potential acquisitions.
The notes and the shares of Class A common stock of Centrus issuable upon their conversion have not been registered under the Securities Act or any state securities laws. As such, they may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This announcement is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy the notes.
In other recent news, Centrus Energy reported Q3 2024 financial results, posting a revenue of $57.7 million and a gross profit of $8.9 million, despite a net loss of $5 million. The company is notably focusing on growth, especially the expansion of its Piketon, Ohio facility, backed by $2 billion in customer commitments and a substantial backlog valued at $3.8 billion.
Centrus Energy recently secured a waiver from the U.S. Department of Energy (DOE) permitting the importation of low enriched uranium (LEU) from Russia for processing and reexport to its foreign customers in 2025. However, the DOE has deferred its decision on deliveries scheduled for 2026 and 2027 to a later date. Centrus Energy plans to submit additional waiver requests for these years to meet the anticipated demands of the U.S. nuclear industry.
These are part of recent developments that also include the company's efforts to restore U.S. uranium enrichment capabilities and optimize its cost structure. Centrus Energy is well-positioned to secure a share of the $3.4 billion allocated by Congress for domestic nuclear fuel production, although the timing of future contracts for High-Assay Low-Enriched Uranium (HALEU) remains uncertain.
Analysts have noted that the company's current HALEU contract is due to expire in November 2024, with an unclear extension timeline. Despite this, Centrus Energy remains committed to its growth strategy, focusing on securing new contracts while navigating market fluctuations. The company's significant backlog and customer commitments suggest strong future revenue potential.
InvestingPro Insights
Centrus Energy Corp.'s recent convertible note offering comes at a time of significant financial growth for the company. According to InvestingPro data, Centrus has seen a revenue growth of 14.94% in the last twelve months as of Q3 2024, with total revenue reaching $394 million. This growth trajectory is further supported by a strong EBITDA growth of 62.36% over the same period, indicating improved operational efficiency.
The company's financial health appears robust, with InvestingPro Tips highlighting that Centrus operates with a moderate level of debt and its liquid assets exceed short-term obligations. This financial stability likely contributed to the company's ability to secure favorable terms for its convertible note offering.
Investors have taken notice of Centrus's performance, as evidenced by the stock's strong returns. InvestingPro data shows a remarkable 113.82% price total return over the past three months, and a 73.14% return over the last six months. These figures align with the InvestingPro Tip that the stock has seen a strong return over the last three months.
While the stock has experienced a significant uptick recently, it's worth noting that InvestingPro Tips also indicate that the stock has taken a big hit over the last week, with data showing a -25.68% one-week price total return. This recent dip could be related to the announcement of the convertible note offering, as such events can sometimes lead to short-term price fluctuations.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Centrus Energy Corp., providing a deeper understanding of the company's financial position and market performance.
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