Sequans announces $ 50 million financing to strengthen its balance sheet
Use of the proceeds to include the repayment of convertible debt maturing on April 14, 2021, if not converted; repayment of risky debt in euros and general corporate objectives
Sequans Communications SA (NYSE: SQNS), a leading developer and provider of 5G and 4G solutions for critical and massive broadband IoT, today announced the signing of a $ 50 million private financing with Lynrock Lake Master Fund LP, a fund managed by Lynrock Lake LP (“Lynrock Lake”), an investment management company with approximately $ 1.2 billion in assets under management. The financing consists of $ 10 million of US Depository Shares (ADS) and $ 40 million in principal of convertible debt. The funding is scheduled to close on April 9, 2021.
“A stronger balance sheet improves Sequans’ position as we accelerate our Massive IoT business and engage with potential strategic partners interested in our 5G technology. The increased liquidity on our balance sheet also provides the Company with additional working capital to manage the ongoing component and supply chain. dynamic, ”said Georges Karam, CEO of Sequans. “We are delighted to secure this financing with Lynrock Lake, an existing shareholder of Sequans. Lynrock Lake’s long-term, value-driven investment strategy and experience in the semiconductor industry aligns with our goals of maximizing opportunities in massive IoT and high speed 5G / 4G IoT and improve long-term shareholder value. ”
“Sequans is pursuing an aggressive 5G product roadmap for broadband and critical IoT, partially funded by strategic partners and investments from the French government,” said Cynthia Paul, chief investment officer of Lynrock Lake. “We are delighted to partner with Sequans to strengthen their capital structure and improve their strategic positioning as they engage with new and existing partners and suppliers.
The $ 50 million financing includes the sale of $ 10 million ADS at a price of $ 5.50 ADS and $ 40 million of convertible debt that converts to the Company’s ADS at a conversion price of 7.66 dollars. Convertible debt matures in three years and pays annual interest at an interest rate of 5.0625% for cash payments or 6% for payments in kind (PIK).
Sequans retains an option to repurchase convertible debt in certain circumstances after 12 months, in whole or in part, subject to a 9.9% holding limit for Lynrock Lake. Lynrock Lake did not apply for a seat on the board.
The main use of the proceeds will be the repayment of $ 11.7 million of convertible debt and accrued interest due on April 14, 2021, if not converted, and the prepayment of € 6 million (7 million of dollars) of debt in euros. The remaining proceeds will be used for general corporate purposes.
This press release contains forward-looking statements regarding the expected time of the closing of the Transaction and the use of the proceeds. All statements other than actual and historical facts and conditions contained in this release, including statements regarding business strategy and plans, IoT sales expectations and our goals for future operations, are statements. prospective (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations regarding future events and are based on assumptions and subject to risks and uncertainties and subject to change at any time. We assume no obligation to update the information contained in this press release in the event that facts or circumstances subsequently change after the date of this press release. We operate in a very competitive and rapidly changing environment. New risks appear from time to time. In view of these risks and uncertainties, you should not place undue reliance or reliance on these forward-looking statements. Actual events or results may differ materially from those contained in projections or forward-looking statements. In addition to the risk factors contained in our Form 20-F for the year ended December 31, 2020, some of the factors that could cause actual results to differ materially from the forward-looking statements contained in this document include, but are not limited to y limit: (i) contraction or lack of growth in the markets in which we compete and in which our products are sold, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our failure to adjust expenses quickly enough to make up for any unforeseen shortfall, (iv) delays or cancellations of expenses by our customers, (v) unexpected reductions in average selling prices, (vi) the significant fluctuation at which our Quarterly revenues and operating results are subject due to cyclicality in the wireless communications industry and transitions to new traffic technologies. ment, (vii) our inability to anticipate future market demands and the future needs of our customers, (viii) our inability to obtain new concepts or design wins to result in deliveries of our products at the levels and on time that we currently anticipate, (ix) our inability to enter into and execute strategic alliances, (x) our ability to meet performance milestones under strategic licensing agreements, (xi) the impact of natural disasters on our procurement operations and supply chain, (xii) our ability to address material weaknesses in our internal controls relating to controls over the accounting and reporting of complex, non-routine transactions and certain other transactions, including certain revenue agreements, (xiii) the impact of the coronavirus on the ability to operate our business and the research, production of our products or demand of our products by customers whose supply chain is affected or whose operations have been affected by government shelter-in-place or similar orders, (xiv) the impact of the coronavirus on capital markets and our ability to raise debt and equity financing, and (xv) other factors detailed in documents we do from time to time with the Securities and Exchange Commission.
Sequans Communications SA (NYSE: SQNS) is a leading developer and supplier of 5G and 4G chips and modules for massive, high-speed and mission-critical IoT. For massive 5G / 4G IoT applications, Sequans offers a comprehensive product portfolio based on its flagship Monarch LTE-M / NB-IoT and Calliope Cat 1 platforms, offering low power consumption, a wide range of built-in features. and a deployment capability. For high-speed 5G / 4G and critical IoT applications, Sequans offers a portfolio of products based on its Cassiopeia Cat 4 / Cat 6 4G and high-end Taurus 5G chip platforms, optimized for residential, enterprise and industrial at low cost. Founded in 2003, Sequans is headquartered in Paris, France, with additional offices in the US, UK, Finland, Israel, Hong Kong, Singapore, Taiwan, South Korea and China . Visit Sequans online at www.sequans.com.