* Says needs to raise $525 mln
* Largest shareholder to invest $175 mln
* Estimates fourth-quarter loss of 33-38 cents/shr
* Analysts estimated profit of 6 cents/shr
* Shares fall as much as 28 pct
Feb 26 Logistics company UTi Worldwide Inc
said it had breached some debt covenants and would
report a loss for the fourth quarter due to a weak air freight
market, sending its shares down as much as 28 percent in early
UTi said it would need to raise about $525 million to pay
off debt of at least $400 million that could come due in April.
The company had about $200 million of long-term debt and
about $300 million in borrowings under credit facilities as of
Oct. 31, according to regulatory filings. ()
UTi said on Wednesday it would also issue $350 million in
senior notes due 2019 in a private offering.
The company also would raise $175 million by issuing
convertible preferred shares to its largest shareholder, P2
Capital Partners, raising P2's stake in the company to 18.1
percent. The hedge fund currently owns about 10.76 percent of
UTi, according to Thomson Reuters data.
UTi said it had received commitments from affiliates of
Citigroup Global Markets Inc and Morgan Stanley & Co for a new
$150 million five-year credit facility, which it expects to take
up after placing the notes and preferred shares.
UTi, which had a market capitalization of about $1.6 billion
as of Tuesday, said the longer-term refinancing would remove
The company estimated a loss of 33-38 cents per share and
revenue of $1.05 billion to $1.10 billion for the fourth quarter
ended Jan. 31. ()
Analysts had expected a profit of 6 cents per share on
revenue of $1.13 billion, according to Thomson Reuters I/B/E/S.
Chief Executive Eric Kirchner said on a conference call that
freight pricing remained under pressure during the quarter and
that this would continue "for the foreseeable future."
Air shipments in the United States have been falling as
customers choose slower but cheaper modes of shipping, such as
UTi shares were down 24 percent at $11.58 in mid-morning
trading on the Nasdaq.