-- 2.50% Convertible Subordinated Notes due 2010 (the "Subordinated
Notes") with $50 million in aggregate principal amount outstanding; and
-- 2.50% Convertible Senior Subordinated Notes due 2010 (the "Senior
Subordinated Notes") with $92 million in aggregate principal amount
outstanding.
The Company is offering to exchange up to an aggregate of $37.5 million
principal amount, or 75%, of the outstanding Subordinated Notes and up to
an aggregate of $57.5 million principal amount, or 62.5%, of the
outstanding Senior Subordinated Notes.
The Company is conducting the Exchange Offers in order to reduce the
aggregate principal amount of its outstanding indebtedness.
Finisar also announced that it has completed the sale of its Network Tools
Division for $40.6 million in cash and has finalized previously announced
modifications of its existing credit facilities with Silicon Valley Bank,
which removes a condition to its obligation to consummate the Exchange
Offers.
Amended Exchange Offer
Under the Exchange Offers as amended, for each $1,000 principal amount of
Notes, tendering holders will receive consideration with a value not
greater than $870 nor less than $820 (the "Exchange Consideration") with
such value determined by a "Modified Dutch Auction procedure. Under the
original terms, tendering holders would have received consideration with a
value not greater than $750 nor less than $700. The portion of the
Exchange Consideration consisting of cash remains unchanged at $525 per
$1,000 principal amount of Notes and is limited to $50 million in the
aggregate under the terms of the modified Silicon Valley Bank credit
facilities.
The Company also amended the Exchange Offers to revise the VWAP period used
to determine the number of shares of common stock to be issued as
consideration from the 8 trading day period from and including July 13,
2009 to and including July 22, 2009 to the 5 trading day period from and
including July 16, 2009 to and including July 22, 2009.
If the Exchange Offers are successfully completed with the maximum of $95
million principal amount of the Notes accepted, the Company expects to have
a balance of cash and cash equivalents of approximately $50 million with
$47 million in aggregate principal amount of the Notes remaining
outstanding and maturing in October 2010.
The Exchange Offers are scheduled to expire at 5:00 p.m., New York City
time, on Thursday, August 6, 2009, unless they are extended. Tendered
Notes may be withdrawn at any time on or prior to the expiration of the
Exchange Offers.
If the aggregate amount of Notes validly tendered and not properly
withdrawn on or prior to the expiration date at or below the Exchange
Consideration for such Exchange Offer exceeds the amount Finisar is
offering to exchange in such Exchange Offer, Finisar will accept for
payment the Notes that are validly tendered and not properly withdrawn from
such Exchange Offer at or below the Exchange Consideration on a pro rata
basis from among the tendered Notes.
The description of the Exchange Offers in this press release is only a
summary and is qualified in its entirety by all of the terms and conditions
of the Exchange Offers set forth in the Amended and Restated Offer to
Exchange, the Amended and Restated Letter of Transmittal and related
materials filed today with the Securities Exchange Commission (the "SEC").
The financial advisor for the Exchange Offers is Piper Jaffray & Co., the
information agent for the Exchange Offers is MacKenzie Partners, Inc. and
the depositary for the Exchange Offers is American Stock Transfer & Trust
Company.
Completion of Sale of Network Tools Division
On July 9, 2009 the Company announced that is had entered into an agreement
to sell the assets of its Network Tools Division (excluding accounts
receivable) to JDS Uniphase Corporation for a cash purchase price of
approximately $40.6 million. The transaction was completed on July 15,
2009, and the proceeds of the sale will be available to fund a portion of
the Exchange Consideration.
Modification of Credit Facilities
On July 8, 2009, the Company received a written commitment from Silicon
Valley Bank to modify its credit facilities to facilitate the Exchange
Offers. Such modifications were formally documented on July 15, 2009.
Under the terms of the modified credit facilities, the Company has access
to:
-- a $25 million revolving secured line of credit;
-- a $16 million credit line for purchasing accounts receivable on a non-
recourse basis; and,
-- a $4 million credit line for standby letters of credit.
Under the terms of the modified credit facilities, borrowings under the
secured revolving line of credit may be used as part of the cash portion of
the Exchange Consideration, and the Company may use up to an aggregate of
$50 million of cash from all sources for that purpose.
Other than $3.4 million used under the credit line for standby letters of
credit, the Company currently has no borrowings outstanding under these
credit facilities, although it has reduced its cash balance since April 30,
2009 in order to reduce borrowings that were previously outstanding under
its accounts receivable purchasing line of credit.
About Finisar
Finisar Corporation (Contact Information: Contact: Steve Workman Chief Financial Officer 408-548-1000 Victoria McDonald Senior Manager, Corporate Communications 408-542-4261 investor.relations@Finisar.com