Gogo estimates that the net proceeds from the offering of the notes, after deducting the initial purchasers' discount and estimated offering expenses payable by Gogo, will be approximately
Any repurchase of Gogo's existing convertible notes could affect the market price of Gogo's common stock. Gogo also expects that holders of the existing convertible notes that sell their existing convertible notes to Gogo may enter into and/or unwind various derivative transactions with respect to shares of Gogo's common stock and/or purchase or sell shares of Gogo's common stock in the market to hedge their exposure in connection with these transactions. In particular, Gogo expects that certain of the holders with whom Gogo negotiates the repurchase of the existing convertible notes employ a convertible arbitrage strategy with respect to the existing convertible notes and have a short position with respect to Gogo's common stock that they would close, through the entry into and/or unwinding of various derivative transactions with respect to shares of Gogo's common stock (which may include privately negotiated derivatives transactions with the forward counterparties and/or their respective affiliates) and/or purchases of Gogo's common stock or other securities of Gogo's (including the notes offered hereby, in which case such a holder that employs a convertible arbitrage strategy may additionally sell shares of Gogo's common stock in connection with such transactions and/or enter into privately negotiated derivative transactions with the forward counterparties and/or their respective affiliates), in connection with Gogo's repurchase of their existing convertible notes. This activity could increase (or reduce the size of any decrease in) the market price of Gogo's common stock or the notes at that time (and any such sale activity could decrease (or reduce the size of any increase in) the market price of Gogo's common stock or the notes at that time).
In
The forward stock purchase transactions are generally expected to facilitate privately negotiated derivative transactions, including swaps, between the forward counterparties and/or their respective affiliates and investors in the notes and/or Gogo's existing convertible notes relating to shares of Gogo's common stock by which investors in the notes and/or the existing convertible notes will establish short positions relating to shares of Gogo's common stock and otherwise hedge their investments in the notes and/or their investments in the existing convertible notes, as applicable. The forward counterparties and/or their respective affiliates generally expect to, but are not required to, enter into privately negotiated derivative transactions with investors in the notes at the pricing of the notes.
Gogo's modifications of the forward stock purchase transactions with the forward counterparties, if it and the applicable forward country decide to make such modifications, as applicable, and the entry by the forward counterparties into derivative transactions in respect of shares of Gogo's common stock with the purchasers of the notes could have the effect of increasing, or reducing the size of any decrease in, the price of Gogo's common stock concurrently with, or shortly after, the pricing of the notes.
Neither Gogo nor the forward counterparties will control how such investors may use such derivative transactions. In addition, such investors may enter into other transactions relating to Gogo's common stock or the notes in connection with or in addition to such derivative transactions, including the purchase or sale of shares of Gogo's common stock. As a result, the existence of the forward stock purchase transactions, such derivative transactions and any related market activity could cause more purchases or sales of shares of Gogo's common stock over the term of the forward stock purchase transactions than there otherwise would have been had Gogo not entered into the forward stock purchase transactions. Such purchases or sales could potentially increase (or reduce the size of any decrease in) or decrease (or reduce the size of any increase in) the market price of Gogo's common stock and/or the trading price for the notes.
In addition, the forward counterparties (or their respective affiliates) are likely to modify their hedge positions in respect of the forward stock purchase transactions by entering into or unwinding various derivative transactions with respect to shares of Gogo's common stock and/or by purchasing shares of common stock or other securities of Gogo's in secondary market transactions following the pricing of the notes and prior to maturity of the forward stock purchase transactions (and are likely to do so in connection with any amendments that Gogo decides to make to the terms of the forward stock purchase transactions as described above, during the final valuation period or periods, as applicable, under the forward stock purchase transactions, on or around the maturity of the existing convertible notes that Gogo does not repurchase prior to their maturity and on or around any election by a forward counterparty to settle all of a portion of its forward stock purchase transaction early in connection with Gogo's repurchase of the existing convertible notes and/or the notes, as applicable, prior to their maturity or otherwise).
The effect, if any, of any of these transactions and activities on the market price of Gogo's common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of Gogo's common stock, which could affect the value of the notes and the value of the shares of common stock, if any, investors receive upon conversion of the notes and investors' ability to convert the notes.
In addition, in connection with any repurchase of Gogo's existing convertible notes, any forward counterparty may elect to settle a portion of its forward stock purchase transaction early in accordance with its terms, which would result in a delivery of the applicable number of shares of Gogo's common stock to Gogo earlier than the applicable maturity date described above. In addition, Gogo may request that any forward counterparty modify the settlement terms of its forward stock purchase transaction to provide that, in lieu of the delivery of the applicable number of shares of Gogo's common stock to Gogo to settle a portion of its forward stock purchase transaction in accordance with its terms, such forward counterparty would pay to Gogo the net proceeds from the sale by such forward counterparty (or its affiliate) of a corresponding number of shares of Gogo's common stock in a registered offering (which may include block sales, sales on the NASDAQ Global Select Market, sales in the over-the-counter market, sales pursuant to negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices). Any such sales could potentially decrease (or reduce the size of any increase in) the market price of Gogo's common stock and/or the trading price for the notes. The forward counterparties are not required to effect any such settlement in cash in lieu of delivery of shares of Gogo's common stock and, if Gogo requests for any forward counterparty to effect any such settlement, it will be entered into in the discretion of the applicable forward counterparty on such terms as Gogo may agree with such forward counterparty at the time. Gogo may enter into further agreements with the forward counterparties to terminate and/or otherwise modify any remaining portion of the forward stock purchase transactions in connection with any future repurchase of Gogo's existing convertible notes.
This press release is not an offer to sell or purchase, or a solicitation of an offer to sell or purchase, the notes or the shares of Gogo's common stock issuable upon conversion of the notes, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which, or to any person to whom such an offer, solicitation or sale would be unlawful. This press release is not an offer to tender for, or purchase, any existing convertible notes or any other security.
The notes and any shares of Gogo's common stock issuable upon conversion of the notes have not been and will not be registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in
Forward-Looking Statements
This press release includes forward-looking statements regarding Gogo's financing plans, including statements related to Gogo's sale of the notes and intended use of net proceeds from the sale of the notes, including the proceeds of the private placement. Such statements, as well as Gogo's future financial condition and future results of operations, are subject to certain risks and uncertainties including, without limitation, risks related to whether Gogo will consummate the offering of the notes on the expected terms, or at all; market and other general economic conditions; whether Gogo will be able to satisfy the conditions required to close any sale of the notes; the portion of the net proceeds from the sale of the notes reserved to fund future interest payments on the notes, together with funds upstreamed from Gogo's subsidiaries and from other potential sources of liquidity (if any), not being adequate to fund any future liquidity shortfall; the loss of, or failure to realize benefits from, agreements with Gogo's airline partners or customers or any failure to renew any existing agreements upon expiration or termination; the failure to maintain airline and passenger satisfaction with Gogo equipment or Gogo service; any inability to timely and efficiently deploy Gogo's 2Ku service or develop and deploy the technology to which Gogo's ATG network evolves or other components of Gogo's technology roadmap for any reason, including technological issues and related remediation efforts, changes in regulations or regulatory delays or failures affecting Gogo or Gogo's suppliers, some of whom are single source, or the failure by Gogo's airline partners or customers to roll out equipment upgrades or new services or adopt new technologies in order to support increased network capacity demands; the timing of deinstallation of Gogo's equipment from aircraft, including deinstallations resulting from aircraft retirements and other deinstallations permitted by certain airline contract provisions; the loss of relationships with original equipment manufacturers or dealers; Gogo's ability to make its equipment factory line-fit available on a timely basis; Gogo's ability to develop or purchase ATG and satellite network capacity sufficient to accommodate current and expected growth in passenger demand in
Gogo's forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. These and other risks concerning Gogo and its businesses are described in additional detail in its Annual Report on Form 10-K for the year ended
Any one of these factors or a combination of these factors could materially affect Gogo's financial condition or future results of operations and could influence whether any forward-looking statements contained in this press release ultimately prove to be accurate. Gogo's forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and Gogo undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
About Gogo:
Gogo is the
You can find Gogo's products and services on thousands of aircraft operated by the leading global commercial airlines and thousands of private aircraft, including those of the largest fractional ownership operators. Gogo is headquartered in
Investor Relations Contact: |
Media Relations Contact: |
William Davis |
Meredith Payette |
+1-312-517-5725 |
+1-312-517-6216 |
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