Teligent, Inc. (TLGT) stock prices were up 3.69% as of market close on April 26th, 2021, bringing the price per share up to USD$0.6010. Subsequent pre-market fluctuations saw the stock surge 12.31%, bumping it up to USD$0.68.
Conversion of Outstanding Debt
January 27th, 2021 saw the company’s Series C noteholders exchange the entirety of their USD$53 million worth of Series C notes into common stock with an added premium of 60% to the volume-weighted average price of USD$1.11. Other senior secured lenders converted USD$24.5 million of PIK interest into preferred stock with an added premium of 30% to the VWAP of USD$1.11.
Why was TLGT Debt Converted into Equity?
These moves signal the confidence that lenders have in the abilities and future of the company. Since these moves, TLGT’s outstanding funded debt has seen a significant reduction from USD$223 million at the end of June 2020 to USD$105 million.
Amendment to Credit Facility
TLGT also made amendments to its existing Second Lien Credit Agreement to facilitate the provision of USD$4.6 million to be paid in tranches of draw term loans to consolidate TLGT’s liquidity position over the next few quarters. The funds will be available to be drawn in case TLGT finds its liquidity falling below USD$4 million. This, too, is a sign of confidence in the current and future operations of the company by investors and lenders.
Agreement with B. Riley
The company has also collaborated with B. Riley in regard to an at-market issuance sales agreement, which sees TLGT selling up to USD$22.62 million of its common stock to or through B. Riley. The capital generated from this strategy will go towards general corporate purposes, the most pressing of which is the resolution of issues brought up by the U.S. Food and Drug Administration in November of 2019 in a warning letter. The company hopes to stay ready for an inspection by the FDA before it approves resolutions to its raised concerns in regard to a newly constructed injectables facility. TLGT also hopes to diversify the scope of CDMO services that the company offers its customers.
Future Outlook for TLGT
The confidence of institutions providing TLGT with financing seem to be affecting current and potential investors with confidence in the company. As TLGT finds itself in a stable financial position, it can leverage that advantage in the upcoming fiscal quarters to usher in unprecedented growth and increases in shareholder value.