PITTSBURGH—WESCO International, Inc. announces that the redemption of its 6.0% Convertible Senior Debentures due 2029 (the “Debentures”) was completed on September 15, 2016.
Holders of the Debentures received cash totaling $344,804,000, which was equal to the principal amount of the then- outstanding Debentures, in addition to accrued and unpaid interest. Holders who surrendered the Debentures for conversion received 18 shares of WESCO stock for each $1,000 principal amount of Debentures converted. In total, 6,267,688 shares were issued.
As discussed in WESCO’s second quarter earnings call on July 28, the Company will record a non-recurring, non-cash, pre-tax charge of $123.9 million in the third quarter as a result of redeeming the Debentures. Given the Company’s estimates of the third quarter effective tax rate and diluted share count, this equates to a loss per diluted share of approximately $1.70.
The Company expects average diluted shares outstanding of approximately 49 million for the third quarter, including the effect of shares issued upon conversion of the debentures.
“This transaction has enabled us to simplify our capital structure and eliminate future EPS dilution associated with these convertible debt instruments,” said John Engel, Chairman, President and CEO. “We also expect an ongoing benefit from reduced interest expense from having replaced the Debentures with lower-cost debt.”
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