Originally Posted by
Nevets
The note holders didn't have a say on how XJT pays them. XJT had the choice of paying them cash, stock, or a combination thereof. XJT had said in an SEC filling that their intent was to pay in stock only. The XJT note holders' only option was to take the shares or keep the notes at a higher interest rate. XJT only offered the higher interest rate notes in order to entice some of the note holders to stay put and prevent all note holders from requiring XJT to repurchase and possibly requiring bankruptcy protection because of their current cash position. The note holders never had a say or had a choice in getting paid with cash only. This was decided by a vote of the shareholders. In the end, some note holders requied XJT to repurchase the notes with stock and others opted to take the new notes at the higher interest rate.
You're right, I'm not sure why I thought we repurchased the amount with cash. We did work out a deal with the Note Holders though, because they could have demanded it all paid. We paid off $58.9 million with stock and renegotiated the last 69.3 million at 11.25%.
Aviation Today :: ExpressJet Reports Expiration of Tender Offer and Notes to be Repurchased
ExpressJet Holdings (NYSE: XJT) today announced the expiration and results of its tender offer with respect to $128.2 million aggregate principal amount of its 4.25% Convertible Notes Due 2023.
The Paying Agent, The Bank of New York Mellon Global Corporate Trust, reported that $58.9 million in aggregate principal amount of outstanding notes had been validly tendered for purchase as of 5:00 P.M. Eastern on July 31, 2008. As a result and pursuant to the terms of the tender offer, the company will issue 161,494,295 shares of common stock in payment of the repurchase price for the principal amount of the notes validly tendered and to settle accrued and unpaid interest due August 1, 2008.
Following the completion of the tender offer, the company will have $69.3 million aggregate principal of its 4.25% Convertible Notes due 2023 remaining outstanding. Noteholders of record on August 2, 2008, will automatically receive the benefits of the supplemental indenture that becomes effective the same day. From August 2 forward, the notes will be referred to as 11.25% Convertible Notes due 2023.