Sequans To Raise $50M Via Private Institutional To Drive 5G, Broadband Business - Sequans Communications (NYSE:SQNS)

Sequans Communications SA SQNS has raised $50 million in private financing from investment management firm Lynrock Lake LP affiliate Lynrock Lake Master Fund LP.
The funding covers $10 million shares priced at $5.5 per share, signifying a 12.7% discount to the Apr. 6 closing price of $6.3 and $40 million of debt, convertible into shares at a conversion price of $7.66.
The convertible debt will mature in three years and pay a yearly interest of 5.0625% for cash payments or 6% for Payment in Kind (PIK) accruals.
Sequans retains an option to call the convertible debt after 12 months, subject to a 9.9% ownership limit for Lynrock Lake.
The offering proceeds will be utilized to repay $11.7 million in convertible debt and accrued interest due on Apr. 14, 2021, and $7 million (€6 million) in euro-based debt. The remaining proceeds will be used for general corporate purposes.
The funding will bolster the balance sheet to drive its 5G IoT and broadband IoT businesses and working capital for ongoing component management and supply chain dynamics.
Sequans held $7.6 million in cash and cash equivalent as of Dec. 31, 2020.
Price action: SQNS shares closed higher by 0.96% at $6.3 on Tuesday.