CEB said on Monday it might start its $250 Million convertible preferred shares stock rights offering (SRO) on Feb. 26 as part of its fundraising plan.
Details regarding the SRO were not fully disclosed but offer price will be around $0.74 to $0.84, while ex-rights date and record date will be on February 5 and February 10, respectively. Proceeds of the capital raising will be used to address liabilities including a $72.3 Million aircraft operating lease and a $72.3 Million debt repayment which are due within the year.
While the SRO should help bolster CEB’s balance sheet amid limited cash flow due to widespread travel bans, a key concern is the possible dilution for investors. We will provide further details once number of shares and entitlement ratio have been announced.