Workhorse Group Engages in Major Discussions
Workhorse Group Inc. (NASDAQ: WKHS), a technology company innovating in zero-emission commercial vehicles, is currently engaged in discussions to explore a significant transaction. The talks involve a privately held U.S. manufacturer of electric commercial vehicles, heralding the potential for a dynamic partnership.
Details on the Proposed Transaction
The proposal centers around merging the manufacturer into a newly established subsidiary of Workhorse Group. This strategic move would occur in exchange for newly issued shares of Workhorse's common stock. Although specific numbers regarding the shares to be allocated remain under discussion, the expectation is that the majority of the Company’s outstanding common stock would be held by the Manufacturer’s current investors after the deal closes.
Maintaining Nasdaq Listing
All actions taken will be in compliance with Nasdaq's listing requirements. Following the closing of this potential transaction, Workhorse aims to maintain its listing on Nasdaq. This reflects the Company’s commitment to process transparency and shareholder value enhancement throughout this journey.
Refinancing Contemplations
The proposed transaction also includes plans for refinancing the Company’s outstanding senior secured convertible notes. An essential aspect of this refinancing involves the cancellation of associated warrants previously issued to an institutional investor. Funding for these actions is expected through a new convertible note and an influx of roughly $20 million from a sale-leaseback of the Company’s manufacturing facility in Union City, Indiana.
Future Execution and Financial Obligations
Workhorse Group is aiming to execute the refinancing as a prerequisite for the formal agreement on the potential transaction. Before finalizing the merger, the Company plans to address approximately half of its existing obligations under the convertible notes while halting any future investor rights related to additional notes issuance. Furthermore, all outstanding warrants will be canceled as part of this financial restructuring.
Ongoing Discussions with Stakeholders
These negotiations have emerged following extensive evaluations of alternatives alongside investment bank advisors. Both parties, including the Manufacturer and the investor, have yet to agree to final terms. There is always a degree of uncertainty surrounding the completion of such transactions.
Strategic Collaboration and Stockholder Approval
It's crucial to note that any definitive agreements made as a result of these discussions will be subject to stockholder approval and other customary conditions. This essential step ensures that the interests of current shareholders are safeguarded during this transformational phase for Workhorse Group.
Contact Information for Investors
Stakeholders seeking further information can contact Workhorse Group at their corporate headquarters. Aaron Palash and Greg Klassen are available for media inquiries through Joele Frank, Wilkinson Brimmer Katcher at 212-355-4449. For investor relations, Tom Colton and Greg Bradbury from Gateway Group can be reached at 949-574-3860, or via email at WKHS@gateway-grp.com.
Frequently Asked Questions
What is the nature of the potential transaction?
The transaction involves merging a privately held manufacturer into a new subsidiary of Workhorse Group in exchange for newly issued shares.
How will this affect Workhorse Group’s stock?
The deal aims to alter the current stockholder structure, significantly increasing potential ownership by the Manufacturer’s investors.
Will Workhorse remain listed on Nasdaq?
Yes, efforts are being made to ensure Workhorse Group maintains its Nasdaq listing post-transaction.
What steps are planned for refinancing?
The Company intends to utilize new financing sources to address existing obligations under its convertible notes while negotiating further terms.
Who can I contact for more information?
For inquiries, reach out to the investor relations team via the provided email or contact number.
