Solaris Energy slides after boosted $650 mln convertible debt sale

Solaris Energy Infrastructure

07/10/2025 12:59

** Shares of Solaris Energy Infrastructure SEI.N down 5.2% premarket at $44.30 after above-target capital raise

** Houston-based firm early Tues announced pricing public offering of $650 mln 0.25% 6-yr convertible bonds (CBs)

** Offering size increased from $600 mln

** Co intends to use approx $354 mln of net offering proceeds to fully repay its term loan, approx $92 mln to purchase about 80 MW of new turbine capacity to be delivered in Q4, and to fund future growth capital for additional power generation equipment, including new natural gas turbines, among other uses

** Alongside the CBs, co said it priced offering of borrowed 1.8 mln Class A shares at $44 to facilitate delta hedging transactions

** Initial conversion price of the CBs set at $57.20, 30% above the $44 offering price of the concurrent delta offering

** Co plans to use about $57 mln of CBs offering proceeds to fund cost of capped calls, derivative transactions employed to help mitigate potential dilution

** Morgan Stanley, Goldman Sachs and Santander are bookrunning managers for the CBs offering

** SEI has ~67.6 mln shares outstanding for $3.2 bln market cap

** Stock on Mon finished up 4.7% at record high close of $46.75, up 62% YTD

** All 11 analysts covering SEI are bullish and median PT is $45, according to LSEG data

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))