Alcoa: Proposed Public Offering Of Mandatory Convertible Preferred Stock

(RTTNews) - Aluminum company Alcoa (AA) said Monday it has commenced an underwritten public offering of 25 million of its depositary shares (or up to 28.75 million depositary shares if the underwriters of the offering exercise their over-allotment option in full).

Each depositary share represents a 1/10th interest in a share of Alcoa's Class B mandatory convertible preferred stock, Series 1, par value $1.00 per share, $500 liquidation preference per share of mandatory convertible preferred stock (equivalent to $50 per depositary share).

The depositary shares entitle the holders, through the depositary, to a proportional fractional interest in the rights and preferences of the shares of the mandatory convertible preferred stock underlying the depositary shares, including conversion, dividend, liquidation and any voting rights, subject to certain limited exceptions.

Unless converted earlier at the option of the holders or redeemed earlier at Alcoa's option, each share of mandatory convertible preferred stock will convert automatically into a variable number of shares of Alcoa's common stock on October 1, 2017.

Alcoa intends to use the net proceeds of the offering, if completed, as partial consideration to finance the previously announced proposed acquisition of the Firth Rixson business and to pay related fees and expenses. The completion of the offering is not contingent on the completion of the acquisition.