Plug Power announced the pricing of a $375 million convertible senior notes offering on November 18, sending shares down 21%. The hydrogen fuel cell company sold the notes at 95% of face value to qualified institutional buyers.
The 6.75% notes mature on December 1, 2033. Initial purchasers received a 13-day option to buy an additional $56.25 million in notes.
After discounts and expenses, Plug Power expects net proceeds of about $347.2 million. That figure could reach $399.4 million if purchasers exercise their full option.
The company laid out specific plans for the cash. About $245.6 million will go toward paying off 15% secured debentures plus related fees. Another $101.6 million from the offering, combined with $52.4 million in existing cash, will fund the repurchase of roughly $138 million in 7% notes due 2026.
The notes convert at an initial rate of 333.3333 shares per $1,000 in principal. That works out to roughly $3.00 per share.
This conversion price sits 40% above the stock’s $2.14 closing price from November 18. At full conversion, the $375 million offering would create approximately 125 million new shares.
Investors reacted negatively to the potential dilution. The stock tumbled as market participants calculated the impact on existing shareholders.
The company faces restrictions on early redemption. Plug Power cannot redeem the notes before December 6, 2028.
After that date, the company can redeem all or part of the notes if its stock trades above 130% of the conversion price for 20 days within any 30-day period. Redemption would occur at 100% of principal plus unpaid interest.
The new notes rank as general unsecured obligations. They sit equal to existing unsecured debt but junior to any secured loans.
Interest payments happen twice yearly on June 1 and December 1, starting June 1, 2026. The annual rate stands at 6.75%.
Noteholders get a put option on December 6, 2029. They can force Plug Power to buy back their notes at face value plus interest.
If a fundamental change occurs, holders can also demand repurchase at 100% of principal plus accrued interest.
The deal closes around November 21, 2025, subject to standard conditions.
Trading volume spiked well above the average of 118.8 million shares. Year-to-date, the stock has fallen 8.15%.
The company’s market cap currently stands at $2.9 billion. Technical indicators show a sell signal.
The offering price of 95% means Plug Power receives $356.25 million in gross proceeds before expenses. This 5% discount is standard for convertible debt offerings.
The cash from this deal retires higher-cost debt while pushing out maturity dates by nearly eight years.
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