Last-mile delivery vehicle specialist Workhorse Group has entered into a note purchase agreement (NPA) to sell $200 million (£153 million) aggregate principal amount of its 4% Senior Secured Convertible Notes, due 2024, to two institutional lenders.
The proceeds of the offering before expenses are expected to be approximately $194.5 million (£149 million) and will be used to increase and accelerate production volume, advance new products to market, replace previous higher cost financings, and support current working capital and other general corporate purposes.
In addition, Workhorse has entered into an exchange agreement with the holder of its existing 4.5% convertible notes to exchange the full $70 million (£54 million) outstanding principal amount of those notes for shares of the company’s common stock.
After the closing and release of the proceeds, the company will have over $270 million (£207 million) in cash available.
The NPA provides that the notes will initially be convertible into common stock by the holders at $36.14 (£27.72) per share, which is a premium of 35% over the closing price of the common stock on Friday, 9 October.
“With this financing in place, we can more quickly advance our production efforts heading into 2021 by increasing our supply chain component volumes, hiring more manufacturing employees and automating certain sub-assembly processes,” said Workhorse CEO Duane Hughes. “We can also accelerate our production timeline for new, high-demand customer products, including a refrigeration truck for grocery applications as well as a purpose-built class two delivery van, allowing us to address one of the fastest growing vehicle markets in the U.S.
“These new vehicles within our portfolio of products, along with the expanding operations of our drone business, will help to further solidify our leadership and reach in the last-mile EV delivery segment.”
Workhorse is a technology company focused on providing drone-integrated electric vehicles to the last-mile delivery sector.
As an American original equipment manufacturer it designs and builds high-performance, battery-electric vehicles including trucks and aircraft.