Shares of Inseego Corp. (NASDAQ: INSG) experienced a notable increase on the US stock charts today. INSG stock increased 22.89% as of the most recent check during the current trading session, trading at $13.10.
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Initiative for Debt Restructuring and Reduction
Inseego (INSG) has entered into a number of strategic agreements with the goal of reorganizing its capital structure and lowering its overall debt. The company’s outstanding 3.25% convertible notes that are due in 2025 are the main focus of this move.
Notably, the three largest noteholders have committed to either selling their notes to the firm for cash or exchanging them for long-term debt and equity. Together, they own over $125 million in face value, or nearly 80% of the existing 2025 Notes. This significant debt reduction was achieved at a 30% discount to the face value of the notes, thereby enhancing Inseego’s capital structure.
Financial Strengthening and Future Outlook
Through these agreements, Inseego is making significant strides in reducing its debt burden and fortifying its financial position. This restructuring, alongside improved operational results, positions Inseego for long-term success.
To partially finance the $32.1 million Convertible Debt Repurchase of the Highbridge Notes, Inseego secured a $19.5 million loan under a Loan and Security Agreement with South Ocean and Participating Lenders, including North Sound Ventures, LP, and the Company’s Executive Chairman, Philip Brace.
Inseego has also committed to a Convertible Debt Exchange with noteholders for their $80 million aggregate principal of the 2025 Notes. The terms stipulate an exchange of these notes for a mix of new long-term debt and equity at a discounted rate of $700 per $1,000 face value, similar to the Highbridge Notes repurchase.
The new notes will bear an annual interest rate of 9%, payable semi-annually in cash, with a maturity date set for May 1, 2029. These new notes will be senior secured indebtedness of Inseego, taking precedence over the remaining 2025 Notes in terms of payment priority.
