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Orbotech Restructures Debt
June 14, 2016 | PRNewswireEstimated reading time: 1 minute
Orbotech Ltd. has successfully repositioned its debt structure through a series of transactions.
On June 9, 2016 the company conducted a public share offering of 3,850,000 ordinary shares. On June 13, 2016 the company entered into a new term and revolving debt agreement in the UK in the amounts of $110 million and $15 million, respectively. The net proceeds from the offering (approximately $100 million) combined with the proceeds of the UK term debt agreement will be used to retire the entire outstanding balance of the company's 2014 Credit Agreement in the amount of $202 million. The revolving debt facility is available for working capital purposes in the company's semiconductor device business, if needed. All of these transactions are expected to close by the end of the second calendar quarter; accordingly, the company expects to record a one-time charge in the second quarter of approximately $6.2 million associated with the retirement of the 2014 Credit Agreement.
"We are very pleased to have successfully executed this series of financing transactions which, we believe, will immediately increase shareholder value. The significant reduction in interest expense, net of the shares issued, is expected to be accretive to earnings per share on both pro forma and prospective bases," stated CFO Ran Bareket. "The reduction in both interest expense and leverage on our balance sheet is considerable. In addition, the new debt agreement is secured only by the assets of the company's SPTS subsidiaries, whereas our previous Credit Agreement was secured by company assets worldwide. As a result, we have substantially improved the strength of our balance sheet, seized upon current favorable conditions in the capital markets and enhanced operating flexibility for future growth opportunities."
The terms of the new UK debt agreement were filed separately on Form 6-K with the Securities and Exchange Commission on June 13, 2016.
About Orbotech Ltd.
Orbotech Ltd. is a global innovator of enabling technologies used in the manufacture of the world's most sophisticated consumer and industrial products throughout the electronics and adjacent industries. The Company is a leading provider of yield enhancement and production solutions for electronics reading, writing and connecting, used by manufacturers of printed circuit boards, flat panel displays, advanced packaging, micro-electro-mechanical systems and other electronic components. Virtually every electronic device in the world is produced using Orbotech systems.
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