Surf Air Mobility Enters Into Binding Terms For A $35.2M Mandatory Convertible Debenture With GEM Global Yield LLC; Parties Agree To Cancel Previously Issued Shares, Restrict Sales And Redemption Rights, Increase Capacity Under $400M Share Subscription
Portfolio Pulse from Benzinga Newsdesk
Surf Air Mobility Inc. (NYSE:SRFM) has entered into binding terms for a $35.2 million mandatory convertible debenture with GEM Global Yield LLC. The agreement includes the cancellation of certain previously issued shares, restrictions on sales and redemption rights, and an increase in capacity under a $400 million share subscription facility. The terms aim to reduce near-term overhang by canceling most of GEM's freely tradable shares in SRFM, impose a volume restriction on sales related to the debenture, and provide the company with the flexibility to redeem the debenture at 115% of par value to avoid dilution. GEM has agreed to refresh the company's ability to access up to $400 million under the Share Subscription Facility. The final terms are subject to further negotiation and will be detailed in definitive agreements.
December 28, 2023 | 1:34 pm
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Surf Air Mobility Inc. has agreed on terms for a convertible debenture with GEM, including share cancellations and sales restrictions, which may reduce stock overhang and provide financial flexibility.
The agreement is likely to have a positive short-term impact on SRFM's stock price as it reduces the overhang of shares and provides financial flexibility, which could be perceived positively by investors. The restriction on sales and the ability to redeem the debenture at a premium may also be seen as steps to protect shareholder value.
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