AST SpaceMobile (NASDAQ:ASTS) shares declined by 7.75% after the company revealed plans to repurchase $225 million of its convertible notes due 2032 and to raise funds through a registered direct offering of common stock.
The company will buy back $225 million of its 4.25% convertible notes maturing in 2032 via private deals with select noteholders. To finance this transaction, AST SpaceMobile is offering 9,450,268 shares of its Class A common stock at $53.22 per share, targeting the same investors involved in the note repurchase.
These steps are expected to retire roughly 8.3 million shares linked to the convertible notes and eliminate about $63.8 million in future interest payments. Following the buyback, approximately $235 million of the convertible notes will still be outstanding.
Scott Wisniewski, President of AST SpaceMobile, commented:
“We are excited to retire approximately half of our 2032 convertible notes and the underlying shares at a price attractive to our shareholders in a series of innovative transactions. These transactions allow us to substantially reduce our outstanding debt and cash interest obligations.”
The company also noted that the previously acquired capped call options will remain in effect, which should help limit dilution if the remaining notes are converted in the future. Both the repurchase and the direct offering are planned to close around July 1, 2025, with the completion of each transaction dependent on the other.