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Date Announced: 14 Jul 2010
Purchase commitments reach $68 million, paving way for laser company to exit Chapter 11 bankruptcy
BEDFORD, MA July 14, 2010—GSI Group Inc. (Pink Sheets: GSIGQ ) (the “Company” or “GSI”) announced today that the subscription period for its rights offering (the “Rights Offering”) expired on July 7, 2010, bringing in irrevocable subscriptions for about 80% of the total number of shares offered.
As such, 37,756,069 shares of the reorganized Company (“New Common Shares”) were subscribed for a total subscription price of $67,960,924. The Rights Offering was conducted pursuant to the Final Fourth Modified Joint Chapter 11 Plan of Reorganization of the Company and certain of its subsidiaries (collectively, the “Debtors”), as confirmed by the United States Bankruptcy Court for the District of Delaware (the “Court”) on May 27, 2010 (the “Plan”).
Pursuant to the Plan, the Company offered to sell to holders of its common shares and vested rights to shares (the “Existing Holders”) up to a maximum of $85 million of New Common Shares upon emergence from bankruptcy at a purchase price per share of $1.80 (the “Price Per Share”). Of the total New Common Shares subscribed for in the Rights Offering, $64,889,486 were subscribed for by payment in cash and $3,071,438 were subscribed for by exchange of GSI Group Corporation’s 11% Senior Notes due 2013 in the principal amount of $210 million (the “Senior Notes”).
Also pursuant to the Plan, and subject to the terms and conditions of a Backstop Commitment Agreement, certain holders of the Senior Notes (the “Backstop Investors”) agreed to backstop the entire Rights Offering. Regardless of the number of shares purchased in the Rights Offering, the Backstop Investors agreed to purchase a minimum of $20 million of New Common Shares by exchanging the principal amount of Senior Notes for New Common Shares at the Price Per Share.
Because the difference between the total amount of the shares offered and the shares subscribed for in the Rights Offering is less than $20 million, 11,111,111 New Common Shares for a total of the backstop commitment amount of $20 million will be issued pursuant to the backstop commitment.
The Rights Offering will be consummated upon the Company’s emergence from bankruptcy, which is subject to numerous closing conditions. The Company currently expects the emergence to occur on or about July 23, 2010 (the “Effective Date”) and the New Common Shares subscribed for in the Rights Offering and to be issued pursuant to the backstop commitment will be issued on such date. The Cash Proceeds will be held in escrow and released on the Effective Date and will, as provided in the Plan, be used to pay down the Senior Notes.
As a result of the Rights Offering and the shares to be issued pursuant to the backstop commitment, the Existing Holders, including those holders who may also be noteholders, will receive approximately 86.0 million New Common Shares or 86.1% of Reorganized Company’s post-reorganization outstanding shares (subject to the distribution of the New Common Shares placed in reserve pending resolution of certain litigation matters unrelated to the Chapter 11 Cases); the holders of Senior Notes, including the Backstop Investors, will receive approximately 13.89 million New Common Shares or 13.9% of Reorganized Company’s post-reorganization outstanding shares; and GSI Group Corporation would issue new debt in the form of new 12.25% Senior Secured PIK Election Notes in the principal amount of approximately $107.04 million pursuant to the Plan.
E-mail: InvestorRelations@gsig.com
Web Site: www.gsig.com
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