Dye & Durham Shares Sink With Plans to Reduce Convertible Debt

By Robb M. Stewart

Dye & Durham's shares were sharply lower after the Canadian legal-practice management software company said it was taking steps to strengthen its balance sheet and reduce convertible debt.

In Friday afternoon trading, the shares were 7.5% lower at C$10.93, widening the fall so far this year to 33%.

Dye & Durham, which affirmed its financial performance in the first quarter of the fiscal year was in line with expectations, said it was refinancing a sizable portion of its convertible debt on favorable terms. When completed, the balance of original convertible debentures will be down by 95 million Canadian dollars ($69 million), decreasing overall convertible debt by C$10 million.

The move will give the company greater flexibility to refinance and strengthen the balance sheet going forward, Chief Executive Matthew Proud said.

As part of the process, the company will offer to cancel up to C$95 million of its issued and outstanding 3.75% convertible unsecured debentures due March 1, 2026, in exchange for up to about C$32.3 million in cash. It will retire the debt at C$750 for every C$1,000 principal amount.

Dye & Durham also will issue C$20.4 million of new debentures to help fund a portion of the cash payable under its offer. Canaccord Genuity will have the right to buy up to C$5 million in new debentures to cover any overallotments. The new debentures will bear interest at 6.50% a year, payable semi-annually, and will be convertible at any time at C$40 a share.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

October 20, 2023 14:08 ET (18:08 GMT)

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