Enthusiast Gaming (TSX: EGLX) has forced the conversion of certain outstanding debentures. Originally set to expire at the end of the year, the company has forced the early conversion of the debt in a move to strengthen its balance sheet.
The forced conversion will see $9.0 million in principal amount of debentures leave the firms balance sheet, along with annual interest costs of $0.8 million. Originally issued in November 2018, the debentures carried a 9% interest rate, along with a conversion price of $3.03 per share, resulting in just under 3.0 million shares being issued in connection with the conversion.
The move to strengthen its balance sheet follows the news from earlier this week, whereby Enthusiast Gaming has entered an arrangement to conduct a bought deal financing valued at $36.9 million. The financing will see 6.4 million shares of the company sold at a price of $5.75, while a selling shareholder will sell a further 2.5 million shares within the offering.
An over-allotment option has also been granted, which would bring gross-proceeds to $42.5 million for the company if fully exercised. Proceeds from the financing are to be used for future acquisitions, working capital, and general corporate purposes.
Enthusiast Gaming last traded at $6.29 on the TSX.
Information for this briefing was found via Sedar and Enthusiast Gaming. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
