Internap Corp (NASDAQ:INAP) reported a private placement of almost 23.8 million shares at a price of $1.81 per share, for gross proceeds of almost $43 million. The funding is provided by a group of shareholders that include associates of or resources managed by GAMCO Investors, Inc. and financials advised by Avenir Corporation. As per the update, the settlement date for the deal is February 27, 2017.
Internap will use the net proceeds to repay a part of its term loan indebtedness. This equity offering along with the debt repayment will allow the firm to meet conditions set under the Third Amendment & Waiver to Credit Agreement as of January 26, 2017 that eases limits on the interest coverage ratio and also on leverage coverage ratio covenants. This will offer with increased operating flexibility as it persists to implement its business program.
Peter D. Aquino, the Chief Executive Officer and President of Internap, said that the confidence shown by their shareholders in the company’s future is extremely encouraging to the entire management team as they continue comprehensive operations development initiative.
The speed with which new team is progressing to right-size business and invest in marketing and sales to capture robust market demand for Colocation as well as Cloud services is impressive. Next measures in the transformation of the new company is to approach the industry as two pure plays, close existing debt refinancing, and start to consider strategic opportunities to support overall organic growth.
Internap reaffirms guidance for FY2016, comprising of revenue of $297 million – $300 million, capital expenditures of $47 million – $50 million and adjusted EBITDA of $81 million – $83 million. The company also confirmed that it intends to announce fourth quarter 2016 financial numbers before market open on March 9, 2017. At the same day, the management will plan a conference call to discuss the results.