Business
Marathon Digital Holdings Announces Completion of Privately Negotiated Convertible Note Exchanges
- $417 Million of Convertible Notes Exchanged at Approximately 21% Discount - Approximately $101 Million in Cash Savings before Transaction Costs -
About this update from Mara Holdings, Inc.
[{"type":"text","content":"- $417 Million of Convertible Notes Exchanged at Approximately 21% Discount - Approximately $101 Million in Cash Savings before Transaction Costs - Transactions Accretive to Existing Stockholders by Approx. $0.55 Per Share Fort Lauderdale, FL, Sept. 20, 2023 (GLOBE NEWSWIRE) -- Marathon Digital Holdings, Inc. (NASDAQ:MARA) (\"Marathon\" or \"Company\"), a leader in supporting and securing the Bitcoin ecosystem, has completed the pricing period of the previously announced, privately negotiated exchange agreements with certain holders of its 1.00% Convertible Senior Notes due 2026 (the “Notes”). On average, the transactions represent an approximately 21% discount to the par value and result in approximately $101 million in cash savings before transaction costs for the Company. In total, Marathon exchanged $417 million aggregate principal amount of the Notes held by such holders (the “Exchanges”) for an aggregate 31.7 million newly issued shares of Marathon common stock. As a result, the Company has reduced its long-term convertible debt by approximately 56% and realized approximately $101 million in cash savings before transaction costs. Following the Exchanges, $331 million aggregate principal amount of the Notes will remain outstanding. “By exchanging $417 million of our Notes at a 21% discount, we have reduced our long-term convertible debt by 56% and captured a total of approximately $101 million, or $0.55 per share, in cash savings for our shareholders,” said Salman Khan, Marathon’s chief financial officer. “For the first time in two years, Marathon’s combined cash and bitcoin holdings now exceed its convertible debt. By generating savings that exceed the value issued in equity, improving our liquidity, and deleveraging the balance sheet, we believe we have significantly strengthened Marathon’s financial profile.” Figure 1: Marathon Convertible Note Exchange -- Accretion Analysis Marathon Convertible Note Exchange -- Accretion Analysis $ in millions except share and per share amounts Current Exchange Pro Forma Enterprise Value $2,277 - $2,277 Less: Notes Payable1 747.5 (416.8) 330.7 Less: Preferred 15.8 - 15.8 Plus: Cash2 105.5 (8.3) 97.2 Market Cap 1,619 2,028 Shares Outstanding 174.3 31.7 206.0 Equity Value Per Share $9.29 $9.84 Implied Change $0.55 Accretion % 5.9% 1 Gross notes payable based on the latest publicly availab...