Microchip Technology Incorporated (NASDAQ:MCHP) shares are trading relatively flat on Friday in the premarket session.
The firm has priced its previously announced underwritten public offering of $1.35 billion of depositary shares, each representing a 1/20th interest in a share of newly issued 7.50% Series A Mandatory Convertible Preferred Stock.
The offering is priced at $50.00 per depositary share, with the offering expected to close on March 25.
Microchip has granted underwriters a 13-day option to purchase an additional $135 million of depositary shares to cover over-allotments.
The net proceeds, estimated at approximately $1.32 billion, will primarily be used to repay existing debt, including notes under the company's commercial paper program.
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Additionally, around $50.1 million will go towards paying for capped call transactions. If the over-allotment option is exercised, some of the proceeds will be directed toward additional capped call transactions.
In other news, Microchip recently introduced a new offering for the electric two-wheeler (E2W) industry.
The company's E2W ecosystem provides scalable solutions to optimize performance in electric scooters and bikes.
Key offerings include advanced battery management systems (BMS) that enhance power efficiency, extend battery life, and improve safety, helping manufacturers develop reliable, feature-rich products with quicker market entry.
As of December 31, cash and short-term investments of the firm stood at $586 million.
According to Benzinga Pro, MCHP stock has lost over 42% in the past year. Investors can gain exposure to the stock via First Trust S&P 500 Diversified Dividend Aristocrats ETF (NASDAQ:KNGZ).
Price Action: MCHP shares are trading lower by 0.45% to $50.77 in the premarket session on Friday.
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