GRAFTECH INTERNATIONAL LTD. - Form 8-K Summary
Business Context and Reporting Period
This Current Report (Form 8-K) was filed on May 30, 2008, by GrafTech International Ltd. The filing addresses a triggering event regarding the company's debt obligations, specifically the redemption of its Convertible Senior Debentures.
Key Financial Metrics and Obligations
- Debt Instrument: $225 million principal amount of 1 1/8% Convertible Senior Debentures Due 2024.
- Redemption Price: 100% of principal plus accrued but unpaid interest.
- Make Whole Payment: Approximately $9 million (or $40.1607 per $1,000 principal amount), representing the present value of remaining interest payments through January 15, 2011.
- Conversion Terms: Conversion price of approximately $16.58 per share (60.3136 shares per $1,000 principal).
- Potential Equity Issuance: Up to 13,570,560 shares of common stock if all debentures are converted.
- Liquidity Sources: Cash on hand, operating cash flow, and up to $175 million from a $215 million revolving credit facility.
Material Changes and Events
On May 30, 2008, the company called for the redemption of the outstanding debentures. This action was triggered because the company's common stock price exceeded $20.725 (125% of the conversion price) for 20 consecutive trading days ending May 29, 2008. The last reported sale price on May 29, 2008, was $26.02. The redemption date is set for June 19, 2008, with the conversion right expiring on June 17, 2008.
Outlook, Management Commentary, and Risks
Management intends to fund the redemption through existing cash resources and borrowings under its revolving credit facility. The filing includes forward-looking statements regarding the successful completion of the redemption and conversion processes. The company notes that actual results may differ due to various risks and uncertainties, referencing disclosures in its 2007 Annual Report (Form 10-K) and Q1 2008 Quarterly Report (Form 10-Q). No debentures are expected to remain outstanding after the June 19, 2008, date.
Key Facts for Investor Verification
- Confirm the final number of debentures converted versus redeemed on June 19, 2008.
- Verify the actual cash outflow required for the redemption and Make Whole Payment.
- Monitor the impact of the potential issuance of 13.57 million shares on earnings per share and ownership dilution.
- Check the utilization of the $215 million revolving credit facility to fund the transaction.
- Review the company's subsequent liquidity position following the debt extinguishment.