Meridian Diagnostics Announces Redemption of Convertible Subordinated Debentures

Strategic Insights -

Meridian Diagnostics, Inc., a leading developer of immunodiagnostic test kits and diagnostic products, has announced its plan to redeem the outstanding balance of its 7-1/4% Convertible Subordinated Debentures due 2001. The company issued the debentures in September 1993 with a principal amount of $11.5 million, of which approximately $7.4 million is still outstanding. Holders of the debentures have the option to convert their shares into common stock or receive cash upon redemption, which is expected to take place on November 30, 1995.

Key Takeaways:

  • Meridian Diagnostics will redeem the outstanding balance of its 7-1/4% Convertible Subordinated Debentures due 2001, which were issued in September 1993 with a principal amount of $11.5 million.
  • Approximately $7.4 million principal amount of the debentures is still outstanding, with the remaining balance having been converted or tendered for conversion into shares of common stock.
  • Holders of the debentures have the option to convert their debentures into shares of Meridian Diagnostics' common stock prior to the redemption date at a conversion price of $5.97 per share.
  • The company expects that holders will convert their debentures into shares of common stock, resulting in a pro forma per-share dilution of between $0.01 and $0.02 per share for the fiscal year ended September 30, 1995, assuming full conversion of the debentures.
  • The redemption of the debentures will reduce the company's annual interest expense, increase shareholders' equity, reduce long-term debt, improve the debt-to-equity relationship, and increase the float of shares available for trading.

Statistics:

  • The principal amount of the debentures issued in September 1993 is $11.5 million.
  • The outstanding principal amount of the debentures is approximately $7.4 million.
  • The conversion price of the debentures is $5.97 per share.
  • The conversion rate of the debentures is 167.5 shares per each $1,000 principal amount of debentures.
  • The expected pro forma per-share dilution for the fiscal year ended September 30, 1995, is between $0.01 and $0.02 per share.

Sources:

  • PRNewswire, October 10, 1995
  • Nasdaq-NNM (Symbol: KITS)
  • CO: Meridian Diagnostics
  • ST: Ohio