“By improving and simplifying its capital structure, the company believes it will increase the speed and likelihood of a full operational recovery,” Roadrunner said in a statement.
The rights offering is expected to be supported by a commitment that is being negotiated with certain funds affiliated with Elliott Management Corp. to purchase all unsubscribed shares of the company’s common stock to ensure that the rights offering is fully subscribed, Roadrunner said.
The Downers Grove, Ill.-based transportation and logistics services provider announced Wednesday that it had filed a registration statement with the Securities and Exchange Commission.
“The company intends to use the proceeds from the rights offering and the backstop commitment to pay in cash all accrued and unpaid dividends on the company’s outstanding shares of preferred stock, to redeem all of the company’s outstanding shares of preferred stock, to pay all expenses incurred by Elliott in connection with any backstop commitment and to pay all fees and expenses of the company in connection with the rights offering,” the announcement said.
“Elliott will not receive any fees for providing the backstop commitment. The company intends to use any remaining proceeds for general corporate purposes.”
Consummation of the rights offering is, among other things, subject to approval by the holders of a majority of the company’s common stock and the holders of a majority of the company’s common stock not beneficially owned by Elliott.
After approval by the stockholders, the rights offering will be made by distributing at no charge to the company’s stockholders one transferrable right for every share of common stock owned by each stockholder as of the record date to purchase new shares of Roadrunner common stock.
Roadrunner said it is currently negotiating and expects to enter into a standby purchase agreement with Elliott to exercise its basic subscription right in full. Elliott would need to agree to purchase from Roadrunner all unsubscribed shares of common stock in the rights offering, at a price per share equal to the subscription price.
Elliott is under no obligation to enter into the standby purchase agreement, and Roadrunner does not expect to commence the rights offering in the event it is unable to enter into the standby purchase agreement with Elliott, the company said.
Elliott currently is a 9.5 percent beneficial holder of Roadrunner common stock and holds all of its outstanding preferred stock.
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