Genie Energy Ltd. (NYSE: GNE, GNEPRA) announced that it will offer to
exchange up to 5,000,000 shares of its outstanding Class B Common Stock
for shares of its Series 2012-A Preferred Stock.
The Company will offer to issue one newly-issued share of Preferred
Stock for each share of Class B Common Stock tendered.
In 2012 and 2013, the Company consummated exchange offers that resulted
in the issuance of 1,917,967 shares of Preferred Stock.
The announced offer will cover up to approximately twenty-five percent
of the outstanding common stock of the Company. Howard Jonas, Chairman
and Chief Executive Officer and controlling stockholder, will not
exchange shares of common stock he owns or controls in this offer.
The Series 2012-A Preferred Stock has a liquidation preference of $8.50
per share, and dividend rights that are senior to distributions on the
common stock, in an annual amount of $0.6375 per share, plus the
potential for an increase in the dividend related to the performance of
Genie’s retail energy provider (REP) business. In conjunction with the
closing of the exchange offer, Genie will extend the periods related to
redemption of the Preferred Stock. Following the extension, the
Preferred Stock is redeemable, in whole or in part, at the option of
Genie following October 11, 2017 (currently 2016) at 101% of the
Liquidation Preference plus accrued and unpaid dividends, and following
October 11, 2018 (currently 2017) at the Liquidation Preference plus
accrued and unpaid dividends. In connection with the prior exchange
offers, the Company suspended payment of dividends on its Class A and
Class B Common Stock.
Howard Jonas said, “Our Preferred Stock provides holders with a healthy
dividend yield that is supported by our strong balance sheet and
operations, as well as some upside potential based on performance of our
REP business. This exchange offer will provide an attractive alternative
for investors who prefer the dividend rights and other features of our
Preferred Stock.”
Jonas concluded “We firmly believe that our common stock is undervalued
by the market at today’s prices. Using our Preferred Stock to buy back
common stock offers a potential win-win for Genie and our stockholders
with different outlooks and investment approaches.”
The exchange offer will commence when the definitive materials
(including an Offer to Exchange and Letter of Transmittal) are filed
with the Securities and Exchange Commission and made available to
Genie’s stockholders and will remain open for at least twenty business
days. When the offer begins, Genie will file the exchange offer
documents with the Securities and Exchange Commission and mail them to
stockholders together with complete instructions on the exchange process
procedure, the transmittal forms and other data.
ABOUT GENIE ENERGY LTD.
Genie Energy Ltd. (NYSE: GNE, GNEPRA) is comprised of IDT Energy and
Genie Oil and Gas (GOGAS). IDT Energy is a retail energy provider
supplying electricity and natural gas to residential and small business
customers in the Northeastern United States. GOGAS is pioneering
technologies to produce clean and affordable transportation fuels from
the world's abundant oil shales and other fuel resources. GOGAS resource
development projects include a conventional oil and gas exploration
program in Israel and in-situ oil shale projects in Colorado, Israel and
Mongolia. For more information, visit www.genie.com.
Copyright Business Wire 2014