Navistar Selling 10 Million New Shares
Vehicle maker Navistar (NYS: NAV) is to float 10 million shares of common stock in a new public offering, the company announced today.
The company expects net proceeds to be up to $218 million if underwriters also exercise their option to purchase up to 1.5 million additional shares of common stock. The company calculated this numbers using the $19.85 share price of its Oct. 22 closing.
Navistar said in a news release that it would use the proceeds for "general corporate purposes." An SEC filing says these will include "capital expenditures and strategic initiatives."
The company has struggled because of difficulties meeting EPA standards. However, this week Navistar announced it had signed a deal with rival Cummins (NYS: CMI) in which the latter will supply more environmentally compliant engines for Navistar vehicles.
Navistar's share price has lost around half of its value since the beginning of this year. Additionally, activist investor Carl Icahn has amassed a stake in the firm and has been agitating for operational changes. The company estimates that the investor's Icahn Group and MHR Group -- founded by a former Icahn employee -- each hold just under 15% of its outstanding shares.
The new share issue amounts to around 14% of the approximately 69.1 million shares outstanding for the company as of the end of September.
The article Navistar Selling 10 Million New Shares originally appeared on Fool.com.Eric Volkman has no positions in the stocks mentioned above. The Motley Fool owns shares of Cummins. Motley Fool newsletter services recommend Cummins. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.