Amyris raises $57.6M in convertible debt issue

In California, Amyris announced that it has priced its private offering of $57.6 million aggregate principal amount of the Company’s 9.50% Convertible Senior Notes due 2019, which will be sold only to qualified institutional buyers and institutional accredited investors in a private placement under the Securities Act of 1933, as amended. The $57.6 million exceeded the $50 million expected offering amount announced on October 14, 2015.

The notes will be unsecured, senior obligations of the Company. The closing of the offering of the notes is expected to occur on October 20, 2015, subject to the satisfaction of customary closing conditions.

The notes will pay interest semi-annually at a rate of 9.50% per annum and will mature on April 15, 2019, unless earlier converted or repurchased. Interest will be payable, at Amyris’s election, entirely in cash or entirely in shares of common stock. The notes will have an initial conversion rate, subject to adjustment, of 443.6557 shares of the Company’s common stock per $1,000 principal amount of the notes, representing a conversion price of approximately $2.25 per share of the Company’s common stock. Amyris expects to use the net proceeds from the offering of the notes for general corporate purposes, which may include the development of the Company’s sales and marketing infrastructure, as well as other strategic transactions and acquisitions. In addition, Amyris will use approximately $18.3 million of the proceeds of the offering to repurchase $22.9 million aggregate principal amount of the Company’s outstanding 6.50% Convertible Senior Notes due 2019 and approximately $8.8 million to repurchase $9.7 million aggregate principal amount of the Company’s outstanding 3% Convertible Senior Notes due 2017, in each case held by purchasers of notes participating in the offering.

At the same time, Amyris announced record low farnesene production costs of $1.75 per liter, representing a 26% decrease over Q2 production costs and a 49% decrease over 2014 production costs. “The cost data point gives us more confidence,” wrote Cowen analyst Jeffrey Osborne, “ in our cost assumptions going forward but we look for success in commercializing new products as well as deleveraging the balance sheet to get more constructive on the stock.

Amyris itself noted that “customers making the switch from limonene to Myralene are purchasing the industrial solvent at an approximately 30% lower price compared to current limonene market prices and are achieving better cleaning performance with limited environmental impact.”

Osborne added, “Amyris currently produces three molecules, with farnesene, or a 15-carbon molecule which the company brands as Biofene, being the biggest driver of the company’s proprietary polymer business. In line with this development, Amyris has accelerated its sales activity for farnesene, a polymer that serves a building block for industrial solvent and cosmetic polymers.”

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