Atlas Energy Solutions Inc. (NYSE: AESI) announced plans to offer $300 million in convertible senior notes due 2031 through a private placement to qualified institutional buyers. The company also expects to grant initial purchasers an option to buy up to an additional $45 million of notes within 13 days of issuance.

The notes will be senior, unsecured obligations that accrue interest payable semi-annually and mature on April 15, 2031. Noteholders will have conversion rights under certain circumstances, with Atlas able to settle conversions using cash, common stock, or a combination of both.

Atlas plans to use approximately $66 million of net proceeds to repay outstanding advances under agreements with Stonebriar Commercial Finance LLC, including a $5 million termination fee. Another $75 million will repay borrowings under its 2023 ABL Credit Facility. The remainder will fund general corporate purposes, including purchasing power generation equipment under a Global Framework Agreement with Caterpillar Inc.

The company will enter into capped call transactions with initial purchasers or affiliates to reduce potential dilution from note conversions. These transactions are designed to offset cash payments above the principal amount if Atlas's stock price exceeds the conversion price.

The notes will be redeemable at Atlas's option starting April 20, 2029, if the stock price equals or exceeds 130% of the conversion price for a specified period. Noteholders may require repurchase if certain fundamental changes occur.

The offering requires completion of pricing to determine interest rates, initial conversion rates and other terms. The notes and any shares issuable upon conversion will not be registered under the Securities Act of 1933.