Sevcon raises $10M in rights offering
Southborough-based Sevcon Inc., which designs and manufacturers controls for electric and hybrid vehicles, announced it has raised $10 million in a rights offering to its shareholders.
The rights offering, which was announced in June, was designed to raise capital by giving existing shareholders the option of purchasing preferred stock at a lower price than what’s offered to the general public; in this case, the price was set at $8 per share.
The money raised will be used for “general corporate purposes and growth, including funding Sevcon’s ongoing research and development and product commercialization initiatives, as well as acquisitions of other businesses,” according to a statement.
Sevcon said the rights offering was “substantially oversubscribed,” meaning interest from shareholders exceeded the amount of stock available in the offering. The company said it will issue 465,000 oversubscription shares by the end of the week, while any excess subscriptions will be returned to subscribers afterward.
The preferred stock purchased in the rights offering carries a 4-percent cumulative annual dividend, and is convertible at any time into shares of Sevcon’s common stock, according to the company. The $8-conversion price represents a conversion ratio of three shares of common stock for each share of preferred stock.
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