AST SpaceMobile Announces Cash Buyback
AST SpaceMobile, Inc. has revealed a $225 million cash buyback plan aimed at reducing approximately 8.3 million shares. Additionally, around $63.8 million will go toward covering associated interest costs.
The buyback will be funded by issuing 9.45 million shares to participating note holders.
Located in Midland, Texas, AST SpaceMobile (NASDAQ:ASTS) has set a price for the buyback that intends to support the development of a unique space-based cellular broadband network. This network will be accessible to everyday smartphones and cater to both commercial and government markets. The total principal amount of around 4.25% is linked to various negotiated repurchase agreements with holders of the 2032 Convertible Notes.
This buyback strategy will result in a reduction of liabilities on AST SpaceMobile’s balance sheet. The completion of these transactions is expected to align closely with July 1, 2025, subject to mutual conditions.
“We anticipate reducing about half of our 2032 conversions and outstanding stocks, which we believe will appeal to shareholders,” a representative stated. The plan, they noted, will significantly lower both outstanding debt and cash interest obligations.
Convertible Notes and Future Plans
AST SpaceMobile intends to leverage net revenue from the recently registered shares to fund the $225 million buyback associated with the 2032 Convertible Notes. Following this buyback, the unresolved total for the 2032 notes will stand at approximately $235 million.
The initial conversion rate for the 2032 Convertible Notes involves converting them into shares of Class A common stock, with adjustments for any potential dilution. The repurchased shares will be available for future issuance after the buyback is finalized.
As part of this buyback initiative, AST SpaceMobile plans to maintain existing cap calls. These calls are designed to mitigate cash payments and dilution during the conversion process of the notes.
Holders of the 2032 Convertible Notes involved in the buyback may engage in market transactions to manage their hedging positions, which might impact trading prices of the company’s Class A common stock.
Direct Registrations and Financial Guidance
AST SpaceMobile is moving forward with registering 9,450,268 shares of Class A common stock at a price of $53.22 per share for participating note holders.
The registration is in accordance with an effective shelf registration statement filed with the SEC. An electronic version of the prospectus is available on the SEC website, along with additional copies obtainable from AST SpaceMobile’s office in Midland, Texas.
UBS Investment Bank is serving as a placement agent and financial advisor for this financial move, while ICR Capital LLC provides additional financial consultation.
This announcement does not constitute a sale of stock in any jurisdiction outside its regulations.
About AST SpaceMobile
AST SpaceMobile is working to establish the first global cellular broadband network designed for direct use by unmodified mobile devices, aiming to bridge the connectivity gap for around 5 billion mobile subscribers globally.
Forward-Looking Statements
This communication includes several forward-looking statements regarding market expectations and operational results, which involve risks and uncertainties. Any discrepancies between actual and expected results could arise, driven by market conditions and other variables.
AST SpaceMobile cautions against placing undue reliance on these projections. For additional information detailing factors that could materially impact projections, refer to filings with the SEC.
