Hampton Roads Bankshares (HMPR) to Raise Up to $95M in Capital Through Private Placement, Rights Offering
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Hampton Roads Bankshares (Nasdaq: HMPR) today announced that it will undertake a capital raise of at least $80 million, but no more than $95 million through the sale of its common stock in a private placement and a public rights offering. The purpose of the capital raise is to satisfy all regulatory capital requirements and provide significant additional capital.
The Company has entered into a definitive agreement with its three largest shareholders – Carlyle Financial Services Harbor, L.P. ("Carlyle"), ACMO-HR, L.L.C. ("Anchorage") and CapGen Capital Group VI LP ("CapGen" and, together with Carlyle and Anchorage, the "Investors") – to purchase an aggregate of $50 million of its common stock at $0.70 per share in a private placement expected to close in June 2012, subject to satisfaction of the conditions of the agreement, including shareholder and regulatory approvals. Following the closing of the first $50 million in the private placement, the Company plans to conduct a $45 million public rights offering that will allow its shareholders other than the Investors to purchase up to, but no more than, their full pro-rata portion of the total $95 million capital raise at $0.70 per common share. The record date for the rights offering is May 31, 2012. The Investors have agreed not to participate in the rights offering, but in lieu of that participation, will serve as standby purchasers of all or a portion of the shares offered but not purchased in the capital raise. The number of shares the Investors purchase as standby purchasers and the ultimate size of the rights offering will depend on the level of shareholder participation in the rights offering. Upon closing of the $50 million private placement, the Investors have agreed to terminate warrants they hold to purchase 1,836,302 shares of the Company's common stock at $10.00 per share.
The Investors are expected to purchase, in the aggregate, 71,428,571 shares in the initial private placement, plus purchase up to an aggregate of 53,518,176 of the shares not subscribed for in the rights offering. Following the capital raise, Carlyle and Anchorage will each hold no more than 24.9% and CapGen will hold no more than 41.2% of the voting common stock of the Company.
The capital raise and related transactions are subject to regulatory and shareholder approval and other conditions contained in the agreement with the Investors. The Investors will only invest if all invest. If one of the Investors is unable or unwilling to fund its purchase of common stock, the capital raise will not close. In that event the Company's sole remedy against the Investor that determines not to fund its purchase of common stock is liquidated damages of $2.5 million and a waiver by the Investor of its preemptive rights for a period of nine months. The Company will call a meeting of its shareholders as soon as practicable for the purpose of approving the transactions described in this press release.
As soon as practicable after the closing of the first $50 million in the private placement, the Company will file a registration statement with respect to the shares to be sold in, and will commence, the rights offering.
The Company has entered into a definitive agreement with its three largest shareholders – Carlyle Financial Services Harbor, L.P. ("Carlyle"), ACMO-HR, L.L.C. ("Anchorage") and CapGen Capital Group VI LP ("CapGen" and, together with Carlyle and Anchorage, the "Investors") – to purchase an aggregate of $50 million of its common stock at $0.70 per share in a private placement expected to close in June 2012, subject to satisfaction of the conditions of the agreement, including shareholder and regulatory approvals. Following the closing of the first $50 million in the private placement, the Company plans to conduct a $45 million public rights offering that will allow its shareholders other than the Investors to purchase up to, but no more than, their full pro-rata portion of the total $95 million capital raise at $0.70 per common share. The record date for the rights offering is May 31, 2012. The Investors have agreed not to participate in the rights offering, but in lieu of that participation, will serve as standby purchasers of all or a portion of the shares offered but not purchased in the capital raise. The number of shares the Investors purchase as standby purchasers and the ultimate size of the rights offering will depend on the level of shareholder participation in the rights offering. Upon closing of the $50 million private placement, the Investors have agreed to terminate warrants they hold to purchase 1,836,302 shares of the Company's common stock at $10.00 per share.
The Investors are expected to purchase, in the aggregate, 71,428,571 shares in the initial private placement, plus purchase up to an aggregate of 53,518,176 of the shares not subscribed for in the rights offering. Following the capital raise, Carlyle and Anchorage will each hold no more than 24.9% and CapGen will hold no more than 41.2% of the voting common stock of the Company.
The capital raise and related transactions are subject to regulatory and shareholder approval and other conditions contained in the agreement with the Investors. The Investors will only invest if all invest. If one of the Investors is unable or unwilling to fund its purchase of common stock, the capital raise will not close. In that event the Company's sole remedy against the Investor that determines not to fund its purchase of common stock is liquidated damages of $2.5 million and a waiver by the Investor of its preemptive rights for a period of nine months. The Company will call a meeting of its shareholders as soon as practicable for the purpose of approving the transactions described in this press release.
As soon as practicable after the closing of the first $50 million in the private placement, the Company will file a registration statement with respect to the shares to be sold in, and will commence, the rights offering.
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