HC2 Holdings (HCHC) Announces Rights Offering for Common Stock

HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a diversified holding company, announced today that its Board of Directors (the “Board”) has approved a plan to proceed with steps to launch a $65 million rights offering for its common stock. The Company has filed a registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”). Subject to final approval of the rights offering by the Board, the Company expects to launch the rights offering after the Registration Statement is declared effective by the SEC.

All HC2 stockholders will have the opportunity to participate in the offering and subscribe for their basic subscription amount of newly issued shares of common stock in proportion to their respective existing ownership amounts. HC2 stockholders who exercise their respective full basic subscription rights will have over-subscription privileges giving such HC2 stockholders the option to subscribe for any shares of common stock that remain unsubscribed at the expiration of the rights offering. If the aggregate subscriptions (basic subscriptions plus over-subscriptions) exceed the amount offered in the rights offering, then the aggregate over-subscription amount will be pro-rated among the stockholders exercising their respective over-subscription privileges based on the basic subscription amounts of such stockholders.

The rights offering will be partially backstopped by Lancer Capital LLC (“Lancer Capital”), an investment fund led by Avram Glazer, the Chairman of the Board and the Company’s largest stockholder. Lancer Capital has agreed to exercise and purchase its basic subscription amount and will participate in the oversubscription privileges as described above for a total of up to $35 million (inclusive of the basic subscription amount). Lancer Capital’s backstop commitment will be effected in the manner set forth in the Investment Agreement entered into with the Company on the date hereof, a copy of which will be filed by the Company with the SEC.

HC2 expects to use the proceeds from the rights offering for general corporate purposes.

The Company expects to distribute to each holder of the Company’s common stock one transferable subscription right to purchase shares of the Company’s common stock at a price of $2.27 per whole share for each share of the Company’s common stock held as of the rights offering record date which will be fixed when and if the Board declares the dividend constituting the rights to be issued in the rights offering. Holders of the Company’s existing preferred stock that are entitled to participate in dividend distributions to holders of the Company’s common stock will also be entitled to participate in the rights offering.

Further details of the rights offering will be publicly announced and a prospectus supplement containing the detailed terms of the rights offering will be filed with the SEC following clearance of the registration statement by the SEC and final approval of the rights offering by the Board.

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