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AeroVironment Proposes $1.35 Billion Equity and Convertible Note Offering

A debt-cutting, capacity-funding plan prompted an 8% stock drop over investor dilution concerns

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Overview

  • AeroVironment launched a $1.35 billion capital raise with $750 million in common stock and $600 million in convertible senior notes due 2030, granting underwriters options to add $112.5 million of stock and $90 million of notes
  • The company intends to use net proceeds to repay its term loan and revolving credit facility and allocate remaining funds to expand manufacturing capacity for unmanned systems
  • Shares fell about 8% to around $261 in early trading Tuesday as investors reacted to potential dilution and increased leverage
  • The stock has surged roughly 85% year to date, boosting AeroVironment’s market value to about $13 billion following robust Q4 results and its $4.1 billion BlueHalo acquisition
  • AeroVironment reported $40.9 million in cash and cash equivalents as of April 30, underscoring its drive to bolster liquidity