Sonic Automotive Inc. (SAH) announced that it intends to offer about 9 million shares of its Class A common stock in an underwritten registered public offering. In connection with this offering, Sonic Automotive intends to grant the underwriters a 30-day option to purchase an additional 1.35 million shares of common stock to cover over allotments.
In conjunction with the common stock offering, Sonic Automotive intends to offer about $125 million aggregate principal amount of convertible senior notes due 2029 in an underwritten registered public offering. In connection with this offering, Sonic Automotive intends to grant the underwriters a 30-day option to purchase up to an additional $18.75 million aggregate principal amount of the convertible senior notes to cover over allotments.
Sonic Automotive intends to use the net proceeds from these offerings to repay all or a portion of the principal amount outstanding on its 4.25% Convertible Senior Subordinated Notes due 2015 (which the holders can put to Sonic Automotive in November 2010) and its 6.00% Convertible Senior Subordinated Notes due 2012. If Sonic Automotive is unable to repay these notes, it will use proceeds from the offerings to repay outstanding amounts under its credit facility.
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