Tecnoglass Recovers 83% of Outstanding Warrants in Exchange Offer

Barranquilla-based building materials and glass manufacturer Tecnoglass has ended its warrant exchange offer after recovering 83% of its outstanding warrants. In an attempt to reduce the uncertainty on its balance sheet, beginning in mid-August, the firm had offered one ordinary share for every 2.5 warrants.

In all, Tecnoglass exchanged about 2.7 million shares for 6.7 million warrants, and it expects to officially issue those shares from Colombia on September 14. The remaining warrants can be exercised at any time between now and their expiration date on December 20.

“We are thrilled to improve our capital structure through the completion of the warrant exchange offer,” said Tecnoglass CEO José M. Daes. “Following the completion of the offer, our outstanding shares have increased by 33% to 7.8 million shares.”

The CEO continued. “As a result of the warrants tendered in the offer, our future GAAP quarterly financial results should provide a more clear presentation of core operating results due to the reduced quarter-to-quarter volatility from the accounting impact for changes in the fair value of the warrant liability,” said Daes. “In regards to our balance sheet, we expect a substantial reduction of the warrant liability and an increase in shareholders’ equity that is commensurate with the warrant exchange conversion which provides a better representation of our leverage position and credit metrics.”

Tecnoglass has also set a date for its previously announced dividend payment. It will begin issuing a quarterly dividend this fall, at $0.125 USD per share, starting on November 1. The annual dividend option for shareholders will pay out $0.50 USD per year. Either option can be paid in either case or ordinary shares, with the election period for this decision lasting until October 14.

“We are on track to commence our dividend as planned following the completion of the warrant exchange offer,” said Daes. “The newly initiated dividend will return a portion of excess capital to all shareholders while providing us the flexibility to continue investing in our rapidly expanding operations for years to come.”

The company’s CEO has been optimistic all year about the company’s future in Colombia. In an interview with Finance Colombia, José Baes said his positivity is in part based on Tecnoglass making a transition from sourcing certain high-end products to manufacturing them on site.

“By making the glass in-house, we reduced the cost by 30% to 40% of the material,” said Baes. “So that puts us in a totally different ball game, and I’d like to show that, in the next two to three years, we plan to grow by 25% at least every year organically.”